How Clearc2 CEO Mickey Patton grew Clearc2 to $10M revenue and 450 customers in 2024.

hello everybody my guest today is Mickey Patton he's the president and CEO of clear CE to the leading CRM for manufacturing companies he joined career C 2 in 1998 has an extensive knowledge of how manufacturers can use technology to streamline and maximize their customer relationships throughout the most complex sales cycles and ecosystems Mickey rear ADA tickets to the top sure alright 1998 that puts you in the range of it you've made new around right when serums were coming into style huh yeah we started out with contact management it wasn't called serum at the time it was just basically electronic rolodex if you will that's very good yes the industry started adding things like customer service and sales support and pipelining and marketing so now are you my audience is very familiar with in CRM space anything you want to add in terms of what you do is there really a CRM specifically for manufacturing well we we are actually horizontal we focus on manufacturing because of our longest important relationship without him and so they have a lot of manufacturers in their customer install base so we were they go to CRM from IBM from 1998 through 2008 support and so we have a lot of install base in many factories so that's just kind of our forte but we've certainly across industries like telecommunications health care as well and give me a general sense of what you know company and they sign up with you on average what are they paying are we talking 100 bucks a month a thousand 10 thousand a million no it varies its its software as a service and it can be as low as 37 dollars a month if you use the basics up to sixty seven seventy seven dollars depending on the modules and depending on kind of what you use but then different from the other SAS vendors we don't charge extra for things like storage more users and things like that that is the rate that you're going ok so is it fair to say there may be 60 bucks a month as an average of what a company might pay you okay very good so you know you don't understand that the timeline here says you join the company which means you walk maybe you weren't one of the founders when was the company actually created and how did you join actually yeah that's a long story but I'll make it short the company was a IBM reseller and when I joined the company we that's when we launched the software division so the company had already had you know installed base of customers and now wanted to focus more awkward so I joined the company and I was one of the partners at that time but since then everybody else is gone about everybody else and we're an employee-owned company no no investors no nothing we go March to our own drum I I love that and what's the team size today how many people we have around 50 employees of varies depending on the season and the number of customers we have some of them are contract so that varies but we stay steady between 45 and 50 and where's everybody based in Coppell Texas is most of our it's right outside the DFW Airport area we did have some sales people spread across the country to you know kind of address the regional concerns but most of us are in compell and you know since 1998 when you came and you launch the software product moving away from just being an IBM reseller to today how many customers have you scaled to oh [Music] we have install base around 450 or so customers kind of companies some of them very large some of them quite small we have a user deal that's our small customer and then our largest customers are tens of thousands of users okay so I'm doing some part of this math here because I know you're bigger than this but if I take 400 customers times that $60 average price play notes will be earlier that comes out to about 27 grand a month in revenue I think you're bigger than that that's 400 companies as customers yes they may have 10,000 users who are you know paying that monthly fee so okay so that the question I asked earlier the average price the customer pays you give me a seat price not the average that a company would pay that's correct yes four month price so I see I see I see what you're saying okay so sorry follow-up question in there of the 450 total logos how you know under that you have a hundred thousand seats on those folks or what how many seats would you say sure and you can use that as a general guideline it's it's probably a little less than that but okay maybe call between eighty and a hundred thousand something like that sure yep I mean that's pretty significant so your meetings were Enterprise deals in 450 you know and you got 80,000 seats I mean the math there means you're selling multiply thousand person seats for our plans yeah and that's the read and that's where the regional sales teams come in that's correct interesting how do you break up those kind of the the incentive structures for those regional sales directors is it is it like a typical inside salesperson base plus Commission may stop a are closed base plus Commission that's correct yes but but is it I'm curious what you tie the quota to do you tie it to new AR closed in a specific corridor or it is there an annual quota how do you look at that for us it's an annual quota okay and why'd you decide to structure that the inside sales team that way longevity what's that mean well you in salesperson incentive plans are based upon of hitting goals by the end of the year right and you're hitting accelerators so if you have a plan based upon the accelerators you're going to do it annually so they can hit those accelerators at the end of the year not get for example ten percent but fifteen percent commission so yep okay good makes sense there and walk mean you know turn is critical in the CRM space so so what's your turn today and how do you manage that I said we have very good turn right our customers are very loyal we have very low turnover our challenge is getting those customers to move off of our competitors right so when they come to us our business model is that we provide the services as part of that subscription so you sign up with us and you have a report that you want or you have a change in some of the business processes that you have we do that as part of the subscription but we don't charge extra for services we don't outsource it to another partner so usually we develop really really good relationships with our customers over time so therefore there's there's not much churn so what what is it oh how low is it ten percent a year twenty percent a year it's less than ten percent less than ten percent a year and that's a logo turner revenue churn logo logo term per year that's yes that's obviously really healthy how are you growing how are you adding new customers what channels are using well actually right now what we're transitioning over to is now a more user-friendly model so our our model has been that you contact us we do a demo we tweak the demo we we do a prototype demo if you will it's very involved in sorry in our services implementation folks do pre-sales and so forth right now what we're doing is transitioning our user interface over to a more user friendly model where you can do that demo yourself you still need our services to do some of the implementation because a very specific business models require that complex business model for process flow but we're transitioning over to where that those small deals like I mentioned earlier those pre user deals and so forth they don't necessarily require our intervention or our help so more of a self-service model to capture some of that revenue that we're basically discovering at this time because they don't need our you know complexity so what do you I mean when you look into what they what your CAC is so take all your sales people any direct paid spend you're doing any conferences you're you know you're sponsoring what are you paying to acquire new customer typically 10 bucks a hundred bucks a thousand bucks ten thousand no nothing you measure it's typically not something to measure but can estimated four hits over a thousand dollars for customer right now okay just because of the because of the size of the customer and we have I'm not talking about dollars to revenue I'm just talking about to acquire and you love though if you will yes so that's it's way over that however that that number should come down based upon our new model yep and with 450 customers I mean your your new plan on average are you selling like a 10 person plan a hunter person plan would what are they signing up for an average would you say oh that average is way up there now but what we want to do under the new plan is bring that average down and capture more customers get more logos if you will be easier vernacular and then bring those possibility of those new customers down to a different model you're talking more logos smaller teams that's correct yeah the thousand dollars spend though that's I'm trying to figure out is is that society 10 person plan or a 10 person's cut logo or a 10 seat low going now right now it's it's it's hundred right it's a hundred hundred 100 hundred fifty users right okay yeah I mean that so and you said earlier your Percy price is six about sixty bucks right that's per user yeah I mean so that's pretty good if you're signing if you're spending a grand to acquire one company with a hundred seats at six grand a month in revenue your payback period is essentially instant am i understanding that correctly no we did the math rock so each the customer and I said it's over that he said is it $10 $100 $1000 $10,000 it's certainly over...