How optimizing presales productivity can help startups multiply revenue growth
Today’s high-growth technology companies rely on millions of presales professionals, also known as sales engineers and solution consultants, to explain the value of technologies to buyers and customers. Ultimately, the contributions of these trusted technical advisers help close sales.
But while the C-suite acknowledges presales as a necessary supporting function to sales, executives don’t look to presales when they want to yield more growth.
In each scenario, the incremental revenue impact can be exponential as the number of presales professionals to sales representatives grows.
Instead, the chief revenue officer (CRO), who typically oversees the presales organization, will often try to brute-force growth by adding more sales reps. That’s one way, but there are other approaches, especially in a market where finding talent has its own challenges.
An alternative solution may lie in presales. According to a McKinsey & Company survey, investing in presales can improve conversion rates by five points, raise revenue by 6%-13% and accelerate sales by 10%-20%.
Rather than adding more headcount, the CRO can try something different — the presales force multiplier effect — to boost revenue.
To illustrate this concept, let’s examine three scenarios to quantify the impact of presales on growth.
Scenario 1: High volume, low contract value
Revenue models that have a high volume of transactions with corresponding low annual contract values (ACVs), say $10,000 to $50,000, can commonly have a presales-to-sales ratio of 10:1. If each sales representative has an annual quota of $750,000, this implies that one presales professional can have an annual quota influence of $7.5 million across all 10 sales representatives.
If a presales professional’s productivity were to increase 5% across the $7.5 million top-line influence, it could result in $375,000 ($7.5 million * 5%) incremental revenue without the need for additional headcount.
Scenario 2: Medium volume, medium contract value
Envision a model where ACVs could range from $51,000 to $100,000 and the presales-to-sales ratio is 5:1. If each sales representative has an annual quota of $900,000, this implies that one presales professional can have an annual quota influence of $4.5 million across all five sales representatives. If one presales professional’s productivity were to increase by 10% across the $4.5 million top-line influence, it could result in $450,000 ($4.5 million * 10%) incremental revenue without adding to the headcount.