SuiteCX Revenue (2023)

Introduction hey folks my guest today is valerie peck she focuses on driving customer success customer experience management segment-driven marketing demand generation and a lot of other things for both b2b and bdc companies as well as tactical retention acquisition and loyalty programs she's got a lot of experience in this space over 20 years actually in the space and is now building a tool called sweet cx to help other founders do this at scale valerie ready to get to the top absolutely all right so there's a lot of sort of big categories you mentioned in your bio take me back to the origin story is this a crm is it a demand generation tool what is it well it's a little bit of both we often say that we are psychology needs technology so for years marketing technology uh used to be called crm that got stolen then it was cem then it was cx these tools all are about getting to understand uh what customers are thinking feeling and doing and being able to act upon that either with messaging or campaigns or improving the experience they have so the tools origin was actually in doing this with vizio and uh sticky notes on butcher paper and what year was that when did you write the first line of code for the platform 2013 was when we first said okay enough of this let's do something different got it so 2013 you get going on this and did you sell fun to the start or do you raise some cash we did we are totally bootstrapped with no debt i love that Bootstrapped even today bootstrapped absolutely no debt i love this okay very cool so today when companies are signing up for your platform and again you do a lot of things what's the average company paying per month to use your technology well we do an annual subscription because uh that's preferred by most of the companies because we can make the product a little bespoke so it the annual enterprise view is a roughly twenty six thousand dollars and then there's a ten thousand dollar kickstart to get people going we have clients who pay us over a hundred thousand dollars a year to guarantee their time so that we can coach them and help them as well so it's a it's a range so just be clear your biggest sort of software contracts are in the hundred thousand dollar range per year yes and they can go down as low as a proof of concept of 5 000. yup yup okay and i love this model so you charge your average customer today it sounds like pays 26 000 bucks per year right correct and you charge on average almost well call it call it you know what is almost 35 40 of your annual contract in a setup fee which is good for a variety of reasons help me understand how that helps your business sure well it gets people more productive quicker so that gives them retention that gives them confidence that gives them the ability to talk to others and bring other people internally on board so that helps the company uh get a better upfront uh reputation when people talk to analysts like forrester or gartner or aragon what we find is they say we can be really productive quickly or migrate off what they had quickly and speed to roi is really important in this business yep i hear you there okay and so how Currently serving 30 customers many customers are you serving now today we have about 30. 30 okay so 30 enterprise customers and taking back to your first customer who was it was it vizio you said well actually our first customer was me because i have a consulting company and i told my significant other who actually wrote the code uh if i did one more time of doing what i used to do with the sticky notes on butcher paper and the word uh documents for each uh touch point and then piling printing and pining up your entire website on a table with this thing pinned to the wall i would have killed myself so uh i was the first customer because it saved us incredible amounts of time when we were working with customers and surprised our customers said we want a license at school we like it and so sweet cx was born because we thought gee what a great idea so um our clients to begin with were folks like lexus and wells fargo uh no small names uh and most of the the clients we have were still with us because they've found that it is a very valuable tool for their ongoing uh success oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so attraction 1.2 million seed round 3.7 raised they sold 22 of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderprep.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview and again if we fast forward to today 30 customers valerie at 26 000 a year on average would put you at about 800 000 bucks in arr or about 65 000 Monthly recurring revenue bucks a month sure today in revenue is that about right yeah and then you add on top about double of that with consulting with uh pretty much about a 90 margin and uh the two companies are doing well so when those when those are they are they the same company like the consulting could be the setup fee well interestingly enough we divide professional services which are set up fees and consulting which is bringing our brains to the table as it were from a coaching uh and a diagnostic perspective you know the software game uh when you have consulting associated with professional services and software it devalues the ebitda instead of increasing it so go figure it makes more money but it is it is separate from a operational and a structural viewpoint so let's ignore the consulting for a second if we just look at the setup setup fees and the sas fees from the sas business 800 correct i was going to say about 800k and what do you think you'll do this year in that business i think we're actually on track to grow another 20 we've already had uh three significant sales in the first month of the year so uh we've been growing about 20 percent a year year over year for the last two or three years and and with coven congratulations where is most that growth coming from is it expanding current accounts or brand new accounts brand new accounts and how are where are you finding those folks what's that emotionally they find us so we have a good reputation we're in the top quartile of forester wave and several analysts uh i do some work with the professional association called cxpa and so people are interested in uh companies that are know what they're doing and are hardly focused and so in general we get a lot of referrals from existing customers and the analysts mm-hmm okay got it so that's a lot of your inbound now forrester you know the fortr can also be a pay-to-play model so what did you do to sort of get that relationship going there uh well we spent a lot of time and effort nurturing their team whenever they call up and say that they're doing a white paper a blog or something and can we get them smart on it we take quite a bit of time and effort to make sure that we shine uh in the knowledge that we share not always self-serving from a sweet cx perspective so we've done that over the years we've been blessed with a pretty stable group of analysts at forester and at aragon so over the years we've built up relationships with them and we're very responsive and at times proactive that's great well again it's driven you nice amount of growth here being bootstrapped um do you ever does anyone ever try and hit you and say yeah valerie but you're not funded you don't have a big valuation uh not the only thing we hear from customers is the fact you know when we're dealing with these giant elephants is that you know g we're small but then when we show the fact that the consultancy has been around since 2002 Profits bootstrap have been profitable and sweet cx has been around since 2013 and sweet bootstraps and profitable generally we don't get much pushback occasionally we find somebody who comes around who's interested in us from a investment or acquisition perspective and they see we're small which is a challenge but uh we consider ourselves pretty mighty as well when you launched the agency in 20 2002 help me understand the scale of that today how much revenue does that do annually yeah so we we range we've had three million dollar years okay um and we have on average now about half a million uh in pure consulting that doesn't run through sweet cx yep and and how many customers that pay you for agency work end up converting to a recurring sas customer in suite cx we have we are blessed the past two years we've had 100 conversion uh we had one company drop out because they decided that they weren't going to focus on cx anymore but we have a really high conversion rate of probably about 80 percent and a retention rate of the same as well is that gross or net retention oh it's gross it would be 100 because they're so so we have customers who follow different patterns pattern number one is just a subscription and a license and they renew every year they're sticky because of the interesting things they're doing on the tool and then we have customers who add in a coaching consulting training function and then finally we have pure consulting customers who just want an output and we use the tool as a back-end uh facilitator for them so what would net revenue retention be uh it's about 80 now at least is that sorry you said you said gross was right so so well yeah so we have virtually no overhead uh we work from home we are garage uh think of it it's an awful nice garage sorry valerie valerie i'm not talking about gross margin i'm talking about gross retention so if you look at all of your churned revenue over the past 12 months and then add back the expansion the upgrades you sold that's math i went to usc um so again we're not losing any customers so that would what about downgrades what about people that are downgrading plans okay got it so there's no loss driving over the past 12 months everyone that was paying x amount last year is paying that same x amount today with the exception of one client who went out of the business okay so that is right so that's revenue right so that's 20 20 20 000. okay so then the question is did you upsell other customers to make up the 20 000 yes okay so you're above 100 net dollar retention then correct yeah that's okay great that makes a lot of sense um okay very cool um what would i mean just tell me more about the team how many folks are full-time with you we have five virtual full-time people so we are a gig group where five of us are working full-time several on contracts several employees and then we can expand up to 18 people depending on the workload and what's needed so we have standby statisticians and videographers and other folks that are uh part-time right their gig and we've had a long relationship with them so uh we can gear up and down depending on uh whatever the workload is because how do you know that they're gonna have time for you when you need them since they can't rely on you from a for a full they can't rely on you for a full-time paycheck so uh since most of these folks have been working in the same type of capacity since 1999 uh with me they they make time you know their nights their weekends the good news is most of our work is not fit between nine to five so even if they've gone on and are working full-time somewhere they'll make time to uh uh do the work with us okay makes good sense talk to me about what you want to do with the business you said you've looked at acquisition offers would you ever sell it yeah i think that we're right now we're at the point where it would be really interesting to find a powerful engine big sister brother company who can take on some of the sales functions and some of the back office functions and let us do more in the thought leadership and uh development of new product ideas and execution of them name so we're very open to perfect buyer uh well a perfect buyer might be a business process outsourcing company or ipsos uh from a research perspective or um concentrics from a bpo perspective uh there are some uh grant thornton some of the midsize consultancies uh walker cx all of those would be interesting because they're interested in both capabilities and tools very good that makes a lot of sense valerie heck of a story here let's wrap up with the famous five number one favorite business book uh managing customer experience don peppers and martha rogers managing customer experience number two is there a ceo you're following or studying i i love uh well i used to love bill gates a lot more but i really like his blog and his information and warren buffett is my idol i love that number three what's your favorite online tool for building sweet cx besides your own uh actually uh we do a quite a bit of work with linkedin and social media so that works and uh youtube actually because all of our information is on youtube valerie number four how many hours i sleep to eat every night four that's not healthy well on weekends i catch up but uh you know when you wake up and you've got clients all over the world there's always an email for you yep number four or five here uh talk to me a little bit more about your situation married single kiddos i am in a significant relationship of 15 years and happily unmarried uh he has six grandchildren so that's plenty for me and uh we have two four-legged companions who are my fur kids that's great and valerie do you mind me asking how old you are i am 67. last question something you wish you knew when you were 20 that i would be starting businesses up and that i my parents were doctors they had no idea of how to start a business so i could have benefited i i had an mba but later on so i could have benefited from understanding how to start a business without going to jail guys she launched an agency in 2002 does anywhere between three million and half a million a year in revenue on the agency but in 2018 said you know what there is a big sas play here i'm gonna launch it she did sweetcx360.com is the url they're helping folks large enterprise brands over 30 of them manage things like customer onboarding experiences and things of that nature we'll do about 800 000 bucks in revenue this year they charge on average 10 000 bucks and set up fees and 30 000 bucks a year for their sas contract as they look to scale with their team of five all bootstrapped which we love valerie thanks for taking this yay thanks for your time one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a 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