The Exchanges

Q You do. Okay. So I'd love to learn about that. How many do you have and how does that work?

A So we've got, I'll say again, I can't give you, I mean, I would give exact numbers. I just don't know them on the top of my head. I'll say we've got probably, uh, 12 or 13, um, inside sales reps, um, and they're broken across our direct and indirect teams, so their, their, their day-to-day activities are a little bit different, but our, with our direct team, it's entirely an inbound model, um, so our marketing team is driving customers to Jazz HR, where they can do a number of things, they can download a web paper, they can participate in a webinar, they can watch videos, but ultimately what we really hope they will migrate towards is beginning a free trial, Or request a product demonstration. And that's when our sales team really leans in. And we have found that with the addition of a sales team, the, the lift and conversion rate, uh, uh, more than, um, covers the investment we're making in, in those sales staff. Um, and on top of it, our, our North star is customer lifetime value. So, so if we look at the expense of a sales team, um, of a quota carrying sales team, um, Uh, to bring in a customer who's going to stay with us for 10 years-ish on average, it's, it's more, with that, through that lens, it's, it's more than worth the investment. We don't look at it purely as a, as a, you know, the revenue we bring at the time of the initial sale, because our, our retention metrics …

AI assessment note: “we've got probably, uh, 12 or 13, um, inside sales reps”

Q You do. Okay. So I'd love to learn about that. How many do you have and how does that work?

A So we've got, I'll say again, I can't give you, I mean, I would give exact numbers. I just don't know them off the top of my head. I'll say we've got probably, uh, 12 or 13, um, inside sales reps, um, and they're broken across our direct and indirect teams, so their, their, their day-to-day activities are a little bit different, but our, with our direct team, it's entirely an inbound model, um, so our marketing team is driving customers to Jazz HR, where they can do a number of things, they can download a web paper, they can participate in a webinar, they can watch videos, but ultimately what we really hope they will migrate towards is beginning a free trial Or request a product demonstration. And that's when our sales team really leans in. And we have found that with the addition of a sales team, the, the lift and conversion rate, uh, uh, more than, um, covers the investment we're making in, in those sales staff. Um, and on top of it, our, our North star is customer lifetime value. So, so if we look at the expense of a sales team, Um, of a quota-carrying sales team, uh, to bring in a customer who's going to stay with us for 10 years-ish on average, it's, it's more, with that, through that lens, it's, it's more than worth the investment. We don't look at it purely as a, as a, you know, the revenue we bring at the time of the initial sale, because our, our retention metrics are …

AI assessment note: “we've got probably, uh, 12 or 13, um, inside sales reps”

Q 3000. That's amazing. And are you, are you shifting the cohort, the Kind of customer you're going after, or do you feel like the pool that you're currently kind of mining or swimming in is large enough where you can expand that 3000 pretty rapidly?

A So we, we have gotten laser focused on sort of the classic product market fit questions, right? What problem are you solving for who, how many of them are there? Why will they buy and why will they buy from us? And we have learned that we do really well with companies that are between approximately 25 to 500 employees. If we get above that, The kind of the enterprise recruiting solution that's been solved by some really good, you know, really good companies. I mean, there's to Leo, there's items that others that do really well at enterprise at the same time on the sub-twenty five market called the very small businesses. If you will, there were players that do that very well. Um, we stick to our knitting. If we stay focused on where we win, our, our, our, our numbers stay great. Our customers are happy. And so we're staying focused in that market. There are, uh, there are literally millions of companies in that size in the United States. So we got, you know, we got 3000, we got a long way to go before we begin to get any kind of market saturation and most exciting or the thing that we're, we're, uh, gives us really encouragement about our continued acceleration is that in the market, in that market, 90% of that market has no recruiting solution in place other than word docs and spreadsheets and email inbox management. And, and yet they all will say, they'll all talk about when, …

AI assessment note: “we're staying focused in that market. There are, uh, there are literally millions of companies”

Q Okay, got it. Now, the reason I try to nail down that number is I want to get in your head and understand how you think about CAC. So how do you think about what you can spend to acquire a customer relative to the lifetime value?

A So, um, uh, right now, uh, we want to be, uh, we think about CAC to LTV ratio, which is kind of, I think what you're getting at. Um, we aspire to be north of three. Um, uh, we have just gotten there. Um, uh, a couple of quarters ago. And so right now we're about three and a half. So we feel very comfortable, um, assuming our funnel metrics hold pouring more dollars into the top of the funnel so we can turn the crank and have more customers spit out at the bottom. Um, and, but our, our benchmark is if we can keep our CAC to LTV, um, uh, three or better, we're, we're, we're in pretty good shape.

AI assessment note: “we aspire to be north of three. Um, we have just gotten there.”

Q Wow. Okay, well wait, so this is completely different than what I would have predicted the data would say. So what are you seeing when you dive into some of those 40,000 applications? What are you seeing?

A So it's in the areas you might, you know, when you hear them, they're sort of intuitive. So we're seeing a hiring explosion in things like logistical support, you know, all the companies and people that are involved in, in, uh, those trucks coming down all of our driveways every single day with the things we need to work from home. Um, we're seeing a lot of work in healthcare. We're seeing a lot of work or a lot of hiring in technology. Um, so the hiring is shifted away from From some industries, tragically, such as restaurants and, and, and, uh, retail stores and, and fitness centers and so forth, um, but there are jobs being created elsewhere, and by the data we're seeing, uh, literally at record levels.

AI assessment note: “we're seeing a hiring explosion in things like logistical support”

Q Wow. Okay, well wait, so this is completely different than what I would have predicted the data would say. So what are you seeing when you dive into some of those 40,000 applications? What are you seeing?

A So it's in the areas you might, you know, when you hear them, they're sort of intuitive. So we're seeing a hiring explosion in things like logistical support, you know, all the companies and people that are involved in, in, uh, those trucks coming down all of our driveways every single day with the things we need to work from home. Um, we're seeing a lot of work in healthcare. We're seeing a lot of work or a lot of hiring in technology. Um, so the hiring is shifted away from From some industries, tragically, such as restaurants and, and, and, uh, retail stores and, and fitness centers and so forth, um, but there are jobs being created elsewhere, and by the data we're seeing, uh, literally at record levels.

AI assessment note: “we're seeing a hiring explosion in things like logistical support”

Q Wow. Okay, well wait, so this is completely different than what I would have predicted the data would say. So what are you seeing when you dive into some of those 40,000 applications? What are you seeing?

A So it's in the areas you might, you know, when you hear them, they, they're sort of intuitive. So we're seeing a hiring explosion in things like logistical support, you know, all the companies and people that are involved in, in, uh, those trucks coming down all of our driveways every single day with the things we need to work from home. Um, we're seeing a lot of work in healthcare. We're seeing a lot of work or a lot of hiring in technology. Um, so the hiring is shifted away from From some industries, tragically, such as restaurants and, and, and, uh, retail stores and, and fitness centers and so forth. Um, but there are jobs being created elsewhere, and by the data we're seeing, uh, literally at record levels.

AI assessment note: “we're seeing a hiring explosion in things like logistical support... healthcare... technology”

Q Okay. Got it. And are you, are you finding Google is more effective than Facebook or some other paid channels more effective than both of those?

A So we certainly, um, uh, you know, measure this eight ways from Sunday, uh, are any time, especially with a small business, you are tapping into existing demand versus creating demand. Um, it's going to be more effective, um, because it's, it's, you're, you're tapping into that mid funnel versus top of funnel. So certainly SEM, Google being, being chief among them, uh, is a good return for us. Um, but we do, uh, we do a lot of, um, for example, webinar promotion, a lot of e-paper, uh, or e-book promotion, um, across a wide variety of channels to drive that top of funnel as well. So, but yeah, certainly tapping into, into, uh, Um, into SEM is, is amongst our most effective channels.

AI assessment note: “certainly SEM, Google being, being chief among them, uh, is a good return for us.”

Q What did last question before we wrap up? I mean, again, the most remarkable thing I see about your company is how you've kept churn so low in a business model or sorry, in a business that many people would, would argue is, uh, seasonal, which is recruiting. I mean, how do P how and why do people stick with you once they stop recruiting?

A What we do is, is first, if you are a Let's say you're a, a 70 person company, hypothetically, right? And you're, that means your natural churn of employee, your natural turnover for most businesses about 10%. So if you're 70 people, that means you're losing about seven employees per year. If you're losing seven employees per year, that's, that's a little more than one every other month. You're kind of always recruiting, even if you're not growing. So just through normal employee attrition, you still need a recruiting solution. If you're bigger than that, you're, you're looking for even more people. So what we do is we offer an incentive for people to come to us on an annual contract versus going month to month, although we do offer month to month as well. So if you want to get a little more favorable pricing, you commit to a one or a two or a three year contract and you stick with us. Um, having said that you need to stick with us because if you're losing seven employees a month or between the people you're losing and the new employees you're hiring, you're Look, seven people a year, or, um, uh, between the people you're, you're losing and the new hires you're making, maybe you're recruiting 10, 12, or 50 a month. You always need a recruiting solution in place, and that's where we've been.

AI assessment note: “just through normal employee attrition, you still need a recruiting solution.”

Q Interesting. I mean, you look at companies like HubSpot that rely heavily on kind of the value added reseller model. You're tapping into that now as well. Um, walk me through where you're seeing, I mean, everything seems to be going great. Where are you seeing headwinds?

A Our biggest challenge, uh, is that is education is categorical education is helping SMBs understand that there is a better and highly affordable solution out there. Then the, uh, word document and spreadsheet hell they're stuck in now. And whether you choose us or one of our competitors, there are very good affordable solutions out there that can make life for that. Uh, the HR manager and the hiring manager, if they're not the same person, a lot better. And, and our biggest challenge is whenever you're talking about education, you're typically talking about time. Um, and, and time is never anyone's friend, right? You want to move as fast as you can. Having said that, we have to invest in educating them, educating the market, which is why we do so many webinars, which is why we do so many, uh, eBooks and so forth and, and why we offer the trials we offer. And we spend a lot of time with our prospective customers to help them understand the value of our product. So that's, I think our single biggest Our biggest challenge. Um, and, uh, and, you know, and then, but work in our favor, you know, the, the economic, uh, trends have been favorable. Certainly unemployment being as low as it is, has been a nice tailwind. So, you know, we, we take the good with the bad.

AI assessment note: “Our biggest challenge, uh, is that is education is categorical education”

Q in this press release saying, we're thrilled to integrate with Hacker Earth to empower teams to hire talented engineers faster. What I'm trying to get at here is, With this surreal, a real idea of a channel partner or Hacker Earth, what does that actually look like? So are they putting a button for J.H.R. inside of Hacker Earth or vice versa? What is it? How does it actually work?

A So it varies partner by partner. Um, Um, and we first, we off, we allow them to offer Jazz HR to their customers, uh, either on a resale or a referral basis. So, um, uh, whichever they're more comfortable with. So in all cases, there'll be generally some form of recruiting promotion on their website and that their sales teams will, will be, uh, offering to their customers. Um, their customers either then are referred to us, in which case then we would work with their customer Um, if their customer chooses to purchase, then pay them a revenue share in perpetuity, um, for the business. As long as that, as long as their customers are paying us, we are paying them. We don't limit it after a 12 month period.

AI assessment note: “we allow them to offer Jazz HR to their customers either on a resale or a referral basis”

Q Now, let me dive into the expansion real quick. So a 200 dollar a month Customer after year one. I mean, what do you on average upgrade those folks to? Is it a, you know, up to 300 bucks a month, 400? Do you double them? Where do you get them to?

A So no, we don't double them. So we have a, um, well, first and foremost, um, We don't really look at it that way. Um, we have to start with what's best for our customers and to jam them into things that they don't need. That is a losing strategy. And so number one is we want our customers to be on the right solution for their business. So what of our products do they need to accomplish their goals? And in some cases that means a downgrade, right? That means they're going to move to a lower price product and that's okay because that's how they're going to stick with us for the long haul. Um, we offer three plans. We have sort of a good, better, best. We start at 39 bucks a month. Our mid plan is 200. Our high end is three or nine per month. Um, we offer any of those products can be purchased sort of, uh, or the functionality in those products can be purchased a la carte, um, for a certain amount per month. Um, And we have additional add on sales as well through, through job posts and so forth. So, so it's, it really starts with what's best for the customer. And our perspective is that if we do what's right by our customers, they will stay with us. And when they stay with us, everybody wins most of all the customer, but we do as well. So that's the focus, not just cranking revenue per customer because that's a loose strategy.

AI assessment note: “We don't really look at it that way. Um, we have to start with”