Building a Capital-Efficient Niche SaaS Startup from The Netherlands: Hatch CEO Joris Kroese (Part 4)

Sramana Mitra: Talk to me about the customer acquisition strategy. Beyond the partnerships through which you got to the first base, what did you do from a sales and marketing point of view that got you to the next level?

Joris Kroese: There are different phases there, but we started simply by appointing people who would use their own outreach techniques to prospect potential buyers. It was mainly one-on-one and not so much marketing yet.

Sramana Mitra: It was more sales.

Joris Kroese: Right.

Sramana Mitra: You were selling through online channels – phone, video, and online presentations.

Joris Kroese: Also face to face. The sales cycles were quite long – around six months. Then we just started tweaking that. At some point, you realize that it’s not efficient for a senior person to do outreach all day. It’s much more effective to do face-to-face. We also introduced the BD role. We started doing marketing.

Sramana Mitra: At this point, there are fairly well-understood techniques for marketing and selling. We have a methodology that we use. It’s called Sales 2.0. It’s a funnel management technique. You start at the top of the funnel and gradually qualify. You only invest in in-person meetings if you have a qualified lead and it’s a sizable deal size.

Joris Kroese: Correct. That’s what we also came to learn. We did have a very good retention rate. 90% of our clients kept growing over time. If you can retain your customer, then the lifetime value will go through the roof. It makes it more justifiable to have a high-touch sales model. It differs for different types of SaaS businesses where you’re much more of an enterprise strategic sale or more of a commoditized product.

Sramana Mitra: Definitely. The key question to remember in formulating a sales strategy is the lifetime value of the customer. How much relationship-building you’re going to invest in is a factor of what kind of a customer lifetime value you can get from it.

Joris Kroese: Over which period will you be able to recover your sales investments. That was another area – profitability and gross margin of your revenues.

Sramana Mitra: You’ve reached $10 million ARR at this point with a lot of customers who have been with you for a long time and growing. What do you see as the total available market for your business going forward?

Joris Kroese: Initially, we would only add the online retailers to the product page. We noticed that the store locators were also a bit dated. We really found this product where we maintain the data for all their stores worldwide. It’s a burden that no brand wants to carry. We make sure that it’s accurate and that a lot of consumers still want to buy in-store. This is a channel that is important for most retail brands.

Our product integrates that into the customer journey by adding it also to the product page. We even have interfaces with the point of sale systems of retailers to know which product is in stock at that moment. There are some incremental products and license that we introduced that doubled our TAM because it’s the same client we already have. We simply add another product to the mix.

Sramana Mitra: The idea of the product comes from the customers or from you guys?

Joris Kroese: Both. I think a lot of innovation came from us.

Sramana Mitra: That’s another good thing about having deep customers relationships. The customers share their problems with you. If you have ideas, you can go talk to those customers.

Joris Kroese: Exactly. I personally know the channel well because I have a background on consumer electronics. I speak their language. I know their limitations.

Sramana Mitra: Good luck going forward. Thank you for your time.

This segment is part 4 in the series : Building a Capital-Efficient Niche SaaS Startup from The Netherlands: Hatch CEO Joris Kroese
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