[greenie_beans]

can you explain why i would want to stop cold emailing after the first customers? i know little about this, but i would think the opposite for low revenue per customer, because it's a lower customer acquisition cost? they don't make you enough to spend a lot so low cost efforts like cold email seem like a decent strategy?

[jainvivek]

I also think along the similar lines. Plus meeting prospects physically isn't always possible, especially when you are selling outside own country. So well-targeted emails seem good strategy to generate inbound interest. Less intrusive than calls or texts.

[BillFranklin]

Cold email by definition is not inbound interest.

You can still do cold email don’t get me wrong. But generally for a low ARPA service (<$2k) you want the product to be simple, self-serve, and for customer acquisition to be mostly inbound (ergo from marketing efforts, not outbound emails). Low price points require low CAC, and outbound sales is generally not.

From Apollo, which sells an outbound sales tool: “As a benchmark, try to achieve at least a 20%-30% win rate by closing 2-5 deals per month per rep”. If you have a full time sales rep chasing 5 $100/year deals per month they will close $6k/year. At $1k ARPA they might close $60k/year - after paying salaries you’re not making a profit.

Obviously this doesn’t apply in the early stages, but after you have N customers. Chasing outbound sales for a low price point product is just a recipe for low/slow growth.

[jainvivek]

You are right. I used "inbound" wrongly.

Thanks for detailed explanation. Do you have some ideas on how to determine N?

[BillFranklin]

Depends why you are doing outbound for a low ARPA product.

What problem is cold email solving, and will it eventually solve it? If the product is good enough for the initial customers, I’d switch to marketing and inbound sales.

One reason to stick with cold email is if the product is not good enough yet, so you need to chase people to talk to you and get them to help you improve it

[jainvivek]

That's helpful. Appreciate it.

[greenie_beans]

that makes sense. thanks for explaining!