How Etailinsights CEO Rachael Love grew Etailinsights to $1.4M revenue and 150 customers in 2016.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is help bent on global domination we just broke our 100,000 unit soul Mark and I'm your host Nathan lka okay top dve this winner of The 100 bucks is Danielle Alini he's based overseas he's an employee at a current company and can't wait to break free for your chance to win 100 bucks top tribe simply subscribe to the podcast now and then text the word Nathan to 33444 to prove that you did it again text the word Nathan to 33444 to prove that you did it I give away 100 bucks every Monday folks many of you reach out to me and you say Nathan so many guests on your show talk about the importance of batching but whenever I try and batch you tell me this you go Nathan they don't book back to back times so you or they don't show up after they book it's frustrating the answer is guys you have to use Smart Tools I use a tool called AE scheduling at Nathan lat.com schedu I'll tell you specifically how I use it later on in the episode Nathan laa here this is episode 539 and I want you to know guys I use my podcast as diligence sometimes I'm going to be buying companies in the CRM sales Automation and sales tool base my first one was the top inbox.com and tomorrow you'll learn from Spencer Farber maybe I'll buy them his company's called client it just hit 8 Grand in monthly reiring revenue and is he's aiming for a $5 million valuation for his next round of funding but maybe again maybe I'll buy them before they raise we'll see Nathan lka here good morning everybody Our Guest today is Darren Pierce he's the founder and CEO of etail insights prior to launching the business he spent many years working with B2B startup companies specializing in lead ership strategic development client relationships and maximizing Revenue growth at one of those companies Darren was the director of sales which was called first research that was eventually acquired by Hoover's done in Brad street and most recently Darren helped Bronto software accelerate the revenue in market share to become the leading email service provider in the e-commerce industry he's a graduate of the Walker College of Business at Appalachian State University with two bbas in management and marketing Darren are you ready to take us to the top let's do it all right I have to ask you real quick about Bronto the email marketing space is very very crowded uh why did you leave that company I left Bronto to start detail insights honestly I didn't want to leave it I loved it thought the culture was great I thought the product was going straight to the top but um came up with the idea for etail insights and couldn't pass it up okay so tell us tell us what etail insights does and and then tell us how you make money yeah the best way to tell um that story is to uh back up the beginning of Bronto I I joined Bronto um on around 200 uh8 to help them sell their email marketing software to online retailers so um at the time we realized that online retailers were sophisticated and how they sent emails and they sent A lot of them so Bronto hired me and a few other people to help figure out how we we go market to them and one of the early problems we realized at Bronto was how to find these companies everyone knew who the 500 largest were but you know the midm market of you know 10,000 retailers we just we couldn't figure out who they were whose territory they were in how much online Revenue they were doing so early on I came up with the idea to try to solve that pain um and essentially that's what etail insights is we're a we're a database we index the e-commerce industry we track all the companies and then um we sell that data to companies like Bronto who want to go after that industry and and what your model is it a SAS model or pay as you go or what it's an annual subscription SAS model so they subscribe username and password based okay so what is the what's the average customer pay you per uh month or year yeah that's a good question um we have about 150 customers okay and um our average is skewed down a little bit because um we have a what we call a small business addition that's for real you know true startups that maybe have no sales team or one salesperson so even you know skewed down our average customer is right around the $9,000 per year amount okay got it so and do they pay annually or do they pay monthly they pay annual upfront okay good so uh take us back what year did you found the business in 2011 and what was total 2015 Revenue 2015 last year well um I don't you know we don't talk numbers I'll give you a range where're we do between one and five million annually okay uh and what so you did between one and five and 2015 we did okay and then what is your goal for 2016 what number you know we're almost done what number would make you really happy to finish the year out with in terms of Revenue yeah is the same we we'll stay in that range um you know we um we tend to grow roughly 20 to 30% per year okay good so and is that will that happen here in 2013 or 2016 you on track to do 20 30% year-over-year growth yeah you know December is our largest month but we are on track to exceed that at this point um it's hard to know but um December tends to be a giant month for us got it and then with 150 customers paying that annual price you mentioned if I divide the annual price by 12 I get a monthly kind of a monthly a back of the napkin Mr of $750 arpo and If I multiply 750 times the 150 I get about 112 bucks of of mrr is that about right when you're looking at kind of your monthly books you know that's great question we don't look at it uh um that way so I don't have that that number at my fingertips but that sounds roughly right if I do it differently can I do the 150 customers times nine grand and assume about 1.35 million in last you know trailing 12 months Revenue I think that's fair yeah that's a little low but that's fair okay good all right and then what about uh churn what's your annual churn we use an adjusted churn rate um so we we Renew at 82% so the adjusted turn rate there is 18 and the reason we adjust is that about 10% of our customer base tends to either go out of business or shift Focus so if you take that out um we say our turn rate's 18% if you add that in it's 28% okay so about 18% so somewhere around uh again okay 18 you said 18% annually right per year yep per year good okay and then what about uh customer acquisition cost what are you paying to acquire these customers yes that's good question we have um we have two models we we heavily um acquire via outbound sales so our sales team is doing all the prospecting um that model comes in at about 65% cost and that's adjusted it includes cost to What annual contract value or total lifetime value yep cost to revenue cost to annual contract value um and that does adjust for their share of overhead too um we don't have we don't we are not good at generating a lot of inbound sales um but we will pay you know we will pay on up to $400 per click um for the right customer so just to make that clear so 65% of your ACB which is nine grand is about 5,800 bucks correct that's what you're paying to acquire the customer uh for yep for first year revenue and then they renew at about 82% yeah so at 82% renewal rate they're staying with you for about 4.1 years so do you assume a lifetime value of somewhere around what 20 25 Grand yeah you hit it that's exactly what we assume very cool okay good um how do you exp so how do you build the business is you are you going to try and kind of upsell current customer base or get new customers what's your thesis yeah you're catching us at a interesting time um I expected you would ask that question so um I guess your podcast listeners will know this first because we haven't um unveiled this to the world but we today index and we publish the United States Market the the 10,000 largest retailers in the US um but for six years in kind of our back end we we've been tracking hundreds of thousands of retailers globally and next year we're going to flip the the back end to the front end and and then you know begin indexing all retail websites globally um so I think that opens opens up our Market considerably to sell to other customers outside of the US but still in e-commerce c yeah still in e-commerce that's right so our total available market today is about you know 3,000 um companies 3,000 potential customers and we have 150 of those um but we expect that to grow to about 20,000 next year who are your three biggest competitors yeah because we focus we say hyperfocused on e-commerce we don't have someone that does just that um but there are a lot of companies that do what we do in multiple Industries um you know the top of that list being done in Brad street Hoover heard of you know data.com they're integrated with Salesforce um there's other neat companies that I really like um an example of those would be built with that tracks the technology um so you can get a lot of the same information...