ZoomInfo has been talking about its LTV/CAC (Lifetime Value to Customer Acquisition Cost) ratio for a few years and is now boasting about its sales efficiency ratio. For every dollar the firm invests in Sales and Marketing, it is growing $1.50 to $2.00 in revenue with even better results on the retention business side. These values are well above the SaaS industry average and indicate that the firm should increase its revenue operations investment.
“On the new business side, we aim for somewhere between one and a half to two X return for every dollar that we spend on a customer. And then on the retention and growth or account management side, we look for a six to eight X return for every dollar that we spend there. It’s a super-efficient go-to-market motion. Most software businesses, you put a dollar in, you get like 70 cents out in the first year. We’re putting a dollar in and getting one and a half to two X out.”ZoomInfo CEO Henry Schuck
Schuck described their go-to-market efficiency as one of their “big strategic levers” when acquiring firms with less mature go-to-market motions. ”So when we find companies that don’t have a very sophisticated go-to-market motion, that aren’t truly optimized in the way that they get clients, they’re not doing one and a half to two X efficiency or a 15 X LTV to CAC. Those are great fits for us.”
ZoomInfo has a track record of improving sales efficiency, helping unlock value in acquired assets where the go-to-market motions are aligned. “In our big acquisitions – RainKing, ZoomInfo, and, most recently, Chorus.AI — we really felt like we could leverage the go-to-market motion to accelerate growth within those companies. That’s a key piece.”
When DiscoverOrg acquired RainKing, which had a $40 million ARR, he was convinced that DiscoverOrg could treble their EBITDA to $30 million and accelerate their top-line growth within six months. Within one year of acquiring RainKing, DiscoverOrg’s market valuation grew from roughly $600 million to $2 billion.
One of the inherent advantages of SalesTech is you don’t have to teach sales reps the value and use cases of your product. This shortens ZoomInfo’s ramp time for new reps from several quarters to four months. “it makes it way easier for you to be able to sell to your counterpart on the other end of the line. It’s a big difference for us,” said Schuck.
ZoomInfo heavily hires sales reps directly out of college or soon after and trains them as SDRs, responding to inbound leads and performing outbound prospecting. “In nine months, we start promoting them into the account executive role. So we got value out of them in that ramp time. Then four months after they’ve gone into the account executive role, they’re fully ramped. Thirteen months from when you’ve never sold something until you’re an account executive at one of the fastest-growing technology companies in the country, that’s a really fun promotion to see.”
And because ZoomInfo is hiring sales reps to sell sales and marketing solutions, Schuck does not consider complicated or technical product categories for acquisition. Instead, he looks for solutions that broadly meet the needs of his 20,000 customers and which are easy to understand. Chorus.AI, the Conversation Intelligence vendor that ZoomInfo acquired last month, fits the bill: “We use it, all of our sellers use it. It’s really simple to understand, ‘Hey, we’re going to record and transcribe all your calls, and then you can go do instant coaching on the key moments in those calls’,” remarked Schuck.