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

Upendra Varma: 00:00:00

Hello everyone. Welcome to the B2B SaaS podcast. I'm your host Upendra Varman. Today we have Greg Rich with us. Greg here is the CEO and co founder of a company called Vivanteo. Hey Greg, welcome to the show.

GregRich: 00:00:11

Yeah. Nice to meet you. Thanks very much for having me.

Upendra Varma: 00:00:12

Yeah. All right, Greg. So let's try to understand, right, what your company and product does and like why customers are paying you money.

GregRich: 00:00:19

Why pay this money? Okay. So Vervancio is an enterprise service management platform for customers, service and support teams. Um, so we predominantly sell into the mid market space. So these are typically teams that are either growing or scaling, um, in terms of service and support, and they're kind of moving away from either legacy or, or, um, entry level case management solutions and looking for the, you know, their next evolution in terms of service management. Or, uh, it's going to be sort of enterprise systems that are looking to find products and services that can, um, still allow them to do what they want to do from a service and support perspective. Um, but they're trying to remove the burden of management of those systems. You know, they, they're typically using enterprise systems that are difficult to maintain, difficult to look after. Um, you know, not a great return on investment from that perspective. And they're looking for the new, you know, a new range of products and services that can allow them to do what they want to do, but at a much more cost effective way. Um, yes, that's pretty much it. So the types of people, the types of people that use Vivantio, you know, it, it, you know, we predominantly sold into IT, uh, for, for many, many years, but, uh, you know, Vivantio is a very scalable solution. Uh, we have customers, uh, right across the enterprise now. Um, and you know, one of our areas of focus is in customer service and support. So people providing support. To external customers, whether that's MSPs or, um, you know, support for customers of their organization. And right across the business, HR, finance, you know, everyone's a service team these days. Everyone's providing service either to the business or to customers. And they all need a service management solution like Vivantio.

Upendra Varma: 00:01:51

and, uh, and just one products like serve everybody is that how it is or you've got like sort of products, you know, serving for various, you know, customer profiles that you have, like, so does your same it solution, you know, work well for, for example, uh, external customer facing like customer support team was, you know, helping out my customers, for example.

GregRich: 00:02:09

That's it. So, yeah, it's a very great question, actually. So we, this is something we've changed relatively recently. We did used to have a lot of products, lots of different solutions. And actually what the market was telling us was that it was too confusing, you know, difficult to understand pricing difficult because it's such a comprehensive product to understand which features they needed. Uh, so actually what we did, um, this, uh, this year was we, we, we, we moved away from that completely. Uh, we simplified our license model. Uh, we just have now a single platform, a single price that's designed to be used across. All service teams. Um, and the idea of the platform is that it's a no code, low code product. It allows those customers to turn on and off the features that they need, um, and to run it across multiple service teams. So through roles and permissions and things like that, um, everybody can be using the same platform, uh, but obviously have their own, you know, consolidated view, um, into their part of the business.

Upendra Varma: 00:03:00

Got it. Right. And then I have a couple of questions here, but I'll come to that after a while. Right. So just want to understand the sense of your customer base as of today, right? Like how many customers are you serving on your platform today?

GregRich: 00:03:10

Serving on the platform, hundreds of thousands a day, actually, uh, we have several hundred customers, but you know, if you think about, uh, the technology and the types of customers they're providing service and support to, um, you know, these are large enterprises, um, that, that have customers, either thousands of customers internally or hundreds of thousands of customers externally. So yeah, we, we have hundreds of thousands of people using

Upendra Varma: 00:03:30

you talk about these, like I asked you customers, not users in particular, like the customers who are actually paying you money.

GregRich: 00:03:37

Yeah. So we have about 400 customers at the moment. Yeah,

Upendra Varma: 00:03:40

And that's a hundred thousand is approximately the users or the, you know, the end users essentially who will end up, who will end up

GregRich: 00:03:45

right. Consuming, consuming those services. Exactly. Yeah.

Upendra Varma: 00:03:48

And then how big of a deal are we talking about, right? On an average, how, how much your customer typically pays you? Are we talking about a 10, 000 mid market deal or are we talking about a 100, 000 enterprise deal? Just give us a

GregRich: 00:03:58

Yeah. So, I mean, it ranges, as you can imagine as a, as a product and service like ours, you know, we, we have customers, uh, you know, that are relatively small and we have very, very large customers, um, like, uh, Texas Correctional Institute, you know, who have hundreds of thousands of users actually, in fact, um, our average deal size sits around 25, 000.

Upendra Varma: 00:04:15

Makes sense. And like, are you comfortable, you know, letting us know like where you are as a company in terms of revenue, right? Approximately.

GregRich: 00:04:22

Yeah. So we're now, uh, so we're, we're, we're an old company with a, with a new startup mentality. So, uh, you know, without getting into the backstory, you know, we've been bootstrapped up until about a year ago, um, just over a year ago. And, uh, you know, that was for various reasons. Uh, we're now sort of poised for, for growth. We see a huge market opportunity, uh, especially in the service and support part of the industry. Um, we're sitting at just around 5 million in terms of annual current revenue at the moment, a little bit higher than that in terms of actual revenue.

Upendra Varma: 00:04:49

Got it. Right. So, and just, just, let's move on to your growth journey here for a while. Right. So like, where, where are all of these customers or enterprises or, you know, your deals, like where are they finding you in the first place? Right. How does that top of funnel look like today? Over the past 12 months, for example.

GregRich: 00:05:04

So the past 12 months has been far more predictable than the previous 12 months. I have to, or the previous, uh, years, in fact. Um, so what we've been doing, uh, is investing a lot of time and effort into SEO. So, you know, one of the things that we've wanted to do, especially as it relates to the customer service and support market is try to educate, um, operations teams about. What service management has meant to IT for the last two decades. Um, you know, there are best practice frameworks. There are technologies that IT have been using that really haven't been leveraged across the entire organization. So we've actually spent the last 12 months, um, releasing white papers, you know, putting out tons of blog posts every week that talk about how, uh. Operations teams can elevate service to their customers. Um, looking at service efficiency, service optimization, um, thinking about integrations across the business and things like that. So that has been really the route that we have taken. And that that's where we're seeing most of our growth at the moment.

Upendra Varma: 00:05:57

And like, was that like, um, uh, did you invest a lot in those past 12 months on SEO or were you already been doing for a while? And like, that's what given you most of the results over the past 12 months.

GregRich: 00:06:06

Yeah, we've actually been, uh, yeah, actually it's one of these strange things that, you know, we have a very diverse set of customers, you know, everything from education through professional services, through finance, through FinTech, I mean, it really is a very broad, um,

Upendra Varma: 00:06:20

let me, let me rephrase that question, right? So you've got around 400 customers, right? So just like a big chunk of them, where did they discover you? Like, how did you end up?

GregRich: 00:06:27

Yeah. So 50 percent of our customer base, we're actually using Vivantio for external customer support, uh, to support end users of their products and services. Um, and, you know, coupled with that and the fact that we're now seeing that, uh, customer services teams are, uh, are being, you know, looked at as profit centers for organizations. You know, they really can help drive growth of businesses. You know, they're part of retention. They're part of renewals. They're part of helping with upsell and sale. Um, And, you know, there's a lot of demand that's been put on those teams, uh, in, in these modern days. And so we, we've really seen that there's an opportunity now to leverage that and to make sure that we're, you know, we're providing tools and services to those teams that can really help them elevate the customer experience.

Upendra Varma: 00:07:07

Oh, sorry, Greg. So what I was trying to understand is where did they discover you in the first place? Like, how are they finding you? Like, is it SEO or is there something else? Are you doing any outbound sales? Like what's that first touch point look like for all of your

GregRich: 00:07:18

Well, you have to remember we've been around 20 years. So of course it's, uh, you know, it has varied, um, considerably over that time. Um, you know, as, as a relative as well as a small company, uh, you know, we've had to be quite nimble. We've had to be able to react to, you know, the market in the early days. We were one of the first adopters of Google AdWords, you know, it was fantastic for us. And of course, now we can't compete, uh, in, in that because, you know, our enterprise peers, um, you know, dominate that space and it makes it impossible. So, you know, you have to be nimble. You have to learn how to kind of adjust to market conditions. Um, but to us, like I said, the SEO piece is a big one for us because it brings people to our site. They're inquisitive. They want to understand how they can improve service without spending enterprise dollars in order to do that. Um, and that's typically what leads, leads customers to us. Um.

Upendra Varma: 00:08:01

essentially SEO is the one that's really been driving most of the growth these days. Is that how you can

GregRich: 00:08:05

Certainly. Yeah. I mean, we, we back it up with, uh, with, with, uh, you know, we, we think about it as a multi channel approach. So of course we use LinkedIn, we use display, uh, uh, you know, advertising and things like that, um, and, uh, to, to try and ensure that we continue to get that message across, you know, we don't, it's not just a fire and forget mentality. Uh, obviously we have, uh, email, uh, marketing sequences that we use to keep people informed about, you know, changes to the product service and other white papers that we're releasing. So, you know, we have a number of tactics that surround. Our messaging, um, but, but predominantly it's really that, that education pieces is what we're pinning everything on.

Upendra Varma: 00:08:38

And you do any outbound sales or no today?

GregRich: 00:08:41

So we are doing some, it's, you know, it's proven, uh, positive in the past, and then it's not proven to work so well. Um, but we are fortunate we brought in an EVP of sales, uh, recently, um, under the, uh, remit of our chief revenue officer, um, who has a ton of experience in building out, um, outbound sales teams. And it's very new, you know, we've, we've literally had that position in for a few months. So, uh, in fact, the first employee, uh, working under Jim started this, this week. So, so again, that, that is something we're starting to look at now. Yeah. And again, it's, it's part of the same thing. It's like, how do we get our message out there? How do we actually communicate to people about what our value proposition is?

Upendra Varma: 00:09:18

Got it. Right. So yeah, let's, let's move on. Right. So like I was trying to understand this a lot more because like at 5 million, right. So at 5 million ARR, like what, what would you, what would you bet on? Right. Is SEO your primary thing? If yes, like how do you, like how much of your growth is coming from SEO? Just, just want to get a sense there. Can you just quantify here? Like.

GregRich: 00:09:35

yeah.

Upendra Varma: 00:09:36

Just put a number there. For example, how much percentage of your new leads just come from

GregRich: 00:09:41

I would say it's a large proportion. I would probably say 60 to 70%. You know, you have to remember that we're selling into an industry, uh, where people are, you know, relatively tech savvy, um, to a certain degree, they kind of know what they want. They do a lot of research before they reach out to someone like Vavanchio to look at a product and services. Our, our sales cycles are relatively short, you know, 60 to 90 days because of the amount of time that, um, our prospects have taken to, you know, evaluate and investigate solutions, even before picking up the phone or raising a hand or filling out a form on a website. Um, so, so by the time they actually get to us, they're, they're pretty well informed.

Upendra Varma: 00:10:15

let's talk about the sales cycle, right? So what happens on somebody discovers you when somebody did their research and they can come to you, right? What happens after that? Like how do you convince them to become a paying customer of yours?

GregRich: 00:10:24

So it goes, we go through a number of stages. You know, the first thing we do is we try and have a scoping call with somebody to understand what their pain points are, why they're looking, you know, what are they trying to achieve here? Uh, what are they using at the moment? Um, what's not working for them and what's that kind of current future state look like, you know, what are, what are they trying to get to as a business and what are their business challenges? Um, and based on the back of that, what we'll then do is we'll customize a demo for them that I, you know, showcases some of the features that we have in the product that actually solves those business challenges that they have. Um, so that, that's typically the second stage. Um, and then the third stage really, uh, it can go one of two ways. Oh, sometimes people will ask for just a trial of the system and we're happy to oblige and, you know, give somebody a 30 day access. What we try and encourage them to do is to actually work with our implementation consultants, uh, free of charge to put a. Proof of concept in place. Uh, we, we find that, um, you know, having the opportunity to hold their hand, uh, you know, just for a couple of days in implementing, um, certain parts of the solution and for them to realize how simple and easy it is to configure and how quickly they can actually start getting an ROI, um, that that's really advantageous both for them and for us, um, because they really do understand the value of the products at that point. So, so a POC is really where we try and, you know, try and steer people if they have the time and the willingness and the capacity to do it, yeah.

Upendra Varma: 00:11:39

And then like it's it's 60 odd days is that what you're saying 60 to 90 days It's is that how your sales cycle typically takes?

GregRich: 00:11:45

Uh, 60 to 90 days. Yeah. Yeah. I mean, it can extend beyond that for enterprise customers, you know, uh, those, those, um, that there are larger buying committees and they have to get, you know, procurement is,

Upendra Varma: 00:11:54

Yeah

GregRich: 00:11:54

could be long winded as, as I'm sure, you know, um, but, but, but typically, yeah, for our ideal customers, typically 60 to 90 days. Yeah.

Upendra Varma: 00:12:01

Got it. Right. So, so Greg, like, so just give us a sense, right? So, I mean, I see a lot of your product or, you know, your reviews, most of them are around, you know, it, you know, it service management, something like that. But I recently also see that you, you switched on to this external facing customer support teams and all of it. Right. So how's the journey going on? Like, when did you make the switch and like, like, is it like literally going from zero to one in terms of, you know, acquiring this new customer base and adapting to them, adapting them to a product or like, how's that journey looking like? So, and is that your bet on how you're going to grow from 5 million to let's say your next big milestone?

GregRich: 00:12:31

Yeah. So I think in terms of going to, to answer your first question, thinking about the journey, um, as I alluded to earlier, I think we kind of fell into it to a certain degree, 50 percent of our customers were using it for external support. Um, and it wasn't until we started doing, you know, that market research, um, you know, I'm part of the Gartner, um, CEO startup program. Um, so I get access to their analysts and that's really helpful in terms of validating some of the things that we're seeing in the market. Um, and that was a great opportunity for us to, to really think about where we could differentiate our products and services, you know, the service management market is saturated with products. I mean, especially on the it side. Um, and so, you know, we wanted to find a way that we could carve a niche in that particular market. And we believe for us, customer service and support is that niche. Um, so, so that, like I said, that was really a change in focus. So we already have 50 percent of our customers using it for that. Um, but then on the flip side, we're actually seeing that, uh, you know, enterprise service management is also be becoming a big play, you know, is not really thinking about service and support within a single team, but how can you. You know, holistically think about the way that you're delivering services across your entire organization. Um, and eventually plays well in, in, in that, in that area too. Um, you know, we do find, uh, more often than not, that when we land a new customer, it's not very long before they start thinking about adoption across the organization, into facilities, management, HR, finance, uh, governance, risk, and compliance, you know. All of these teams can make use of a solution like Financio. And there's a benefit in having, uh, you know, a single service management platform across your entire organization. When you want to ask, when you want to start understanding or measuring how you're delivering service, both to your internal and external customers and what, what impact that has on the bottom line.

Upendra Varma: 00:14:10

Let's talk about churn and expansion here, right? I think since you've already touched upon it, right? So how does churn look like for you, right? So typically how, like, how long does a customer stick with you and like, what's that percentage look like?

GregRich: 00:14:20

Oh, forever. They're here forever. No, no, I'm joking. So, so typically the customers, our average tenure is about six years. Um, you know, and it, it does vary, uh, depending on the size of the customer. Uh, our ICP customers have been with us anywhere between nine and 12 years. You know, it's a significantly longer period of time. It's a very sticky product when you start getting into, you know, uh, customers that are really understanding and, and, and, you know, using the value of the product within the organization

Upendra Varma: 00:14:48

And how does, and then talk about that expansion strategy you have, right? So you, you, you mentioned that, you know, one team goes on to, you know, yeah. So just like, how, how is that working for you? Well, and maybe you can just quantify that as well.

GregRich: 00:14:59

Yeah, quantifying is easy. So our, our, our net retention is about 110 to 115%. So, you know, uh, whilst, whilst we do lose some customers and obviously no, no organization or no company ever wants to lose customers, but that's just the natural order of things that, that just happens for, for various reasons. Uh, you know, we are, um, you know, the expansion within our existing customer base is significantly outweighing what we're, what we're losing from, from customer churn.

Upendra Varma: 00:15:22

And which dimension is this along? Is this along the number of users that they're using or is it along, you know, different product line or different, some other team sort of adopting, you know, the platform, like which dimension is this sort of extract revenue that you're generating from an existing customer?

GregRich: 00:15:36

Yeah, it does go in both directions, actually, both sort of vertically and horizontally. Uh, what we find that, um, you know, as product teams mature, they start making or turning on features of Avancio that allowed that team to scale. So that's a big thing for them. They start building out workflows, automation, um, things like that. So, so that obviously helps. Uh, and like I said, the other is horizontally. They start looking at how those service, how that tool can be used to have advantage could be used across their organization. So they can start delivering the same kind of service to their internal customers as deliver to their external customers.

Upendra Varma: 00:16:06

Got it. So Greg, talk about the team today, right? It's how many folks you have in your team working and like, what do they work on?

GregRich: 00:16:11

So we have, uh, so as you can tell from my accent, I'm originally from the UK, uh, and, uh, half of our team, in fact, more than half of our team, about 70 percent of our team are back in the UK at the moment. We have about 45, 50 staff today. Um, and like I said, you know, uh, a large majority of those are back in the UK. Um, uh, mainly, you know, the split of that is most of our sales and marketing team, uh, here in the U S. Um, and we have some product support, you know, implementation, um, professional services teams that, uh, that reside here to support our US customers. And then back in the UK, we have our sort of, uh, our main, uh, technical support teams, engineering teams, uh, operational support, DevOps, that, that kind of thing. Yeah.

Upendra Varma: 00:16:49

And like, what's, what's the vision here, Greg? Like, where do you see your company going? Let's say three to five years. Like what's going to happen? Are you going to raise an external funding and, you know, pump, you know, pump up the growth or like, what's the plan here?

GregRich: 00:16:59

Yeah. So we, we, we've already gone through one small round of funding, uh, at the start of 2022, uh,

Upendra Varma: 00:17:05

how much did you raise?

GregRich: 00:17:06

Yeah, we raised 2 million, uh, in terms of debt, um, and that was to help fuel growth. And like I said, the company has doubled in size, um, during that time. And we've seen, uh, growth, uh, of about 20 to 30%. Um, and that the plan is

Upendra Varma: 00:17:19

But you've been bootstrapped till 2022. Is that correct?

GregRich: 00:17:22

that's right. Yep, absolutely. And then, uh, we've actually, you know, we employed a CFO a few months ago, uh, as part of our growth ambition. And, uh, we've been working with the CFO now, and we will be going out to the, to the wider community at the start of September. Uh, to look at an equity round, what that number looks like. I can't tell you, I don't actually know because we're kind of working on the financial model now and we're kind of finalizing that, that, uh, that, that's that, um, the, the, the, the deck and the, and the, and the sort of go to market that goes along with that. Um, but, but that's, that's the plan for this year. And then in terms of growth, you know, um, it's a 26 billion market, uh, which is growing 13%, uh, year on year at the moment. Um, so, you know. We have a huge, there's a huge opportunity there for us, uh, in, in, uh, in becoming what I would from, from my perspective, you know, I've always considered ourselves to be a customer services organization that develops service management software, not the other way around. Uh, you know, my vision is that, uh, you know, we're seen as that, that we're seeing as the leader in terms of like how our products and services can be used to really elevate the customer experience and what that means to organizations. You know, that, that's a big thing for me. Um, and, and, and, you know, just. Yeah, both in terms of product and in terms of the way that we, you know, we serve as our customers.

Upendra Varma: 00:18:41

That's great. So, all right, Rick, thanks for taking the time to talk to me. Hope you scale your venture to much, much greater heights.

GregRich: 00:18:47

There's lovely talking to you too. Yeah. Thanks very, very much for your time.