Cliff Notes on Questions and Answers
Question: Can you provide a breakdown of the traditional side of the S.C./Verb business compared to the digital side and what those trends are looking like from Q1 2018 to Q1 2019?
Answer: (Jeff Clayborne) We are not pushing the tradition side but focused on the digital side. We did see an increase of 47% Q1 last year to this year primarily due to corporate kits and samples. The biggest driver to this and why this is exciting to us, is because this dramatic increase is directly related or driven from our app itself and because of increased users these apps. (Rory added) The app is that effective and is why we are seeing these results. If you’re a salesperson working for a direct sales business, one of the most effective ways of creating new customers is to give your new prospects that you meet a sample of what you are selling. When you are able to do that, they data shows is that your conversion rates/sales go up rather dramatically. What we have built into the app. Is the ability for the user on their cell phone with a couple of button presses arrange to have a sample sent to that person. Then this activates a drip campaign of interactive videos. This starts when that person receives the sample because you get notified immediately by the way Verb coded and configured the app with delivery. And that drives business. It increases conversion rates like nothing else out in the market. This will work with any business that has something to sell, not just network marketing companies. When more people see this, see the results, we expect to see monumental growth, and nobody has “this”. I don’t want to play down the power of that sampling through the app.
Question: Can you explain the growth on the digital side, I assume it’s the network marketing companies?
Answer: (Jeff Clayborne) Yes, that is correct.
Question: As we think about 2019 and the remaining 3 quarters in the trajectory and given all the capitol you have now and the increased focus on digital now, how should we think about the growth rates?
Answer: (Rory) If you look at the growth of the digital business over last quarter, it was actually 40% increase. That is when we combined the platform and began selling as a joint team. I do expect that rate to continue. By the way, that platform was not completed until sometime in January 2019, so when we start seeing full quarters of our combined team working, and the marketing plans that we have now initiated, yeah, I believe we have every reason to believe that, that growth is going to continue and accelerate.
Question: Is that growth of 40% year over year or sequentially?
Answer: (Rory) That is 40% growth over last quarter… sequentially.
Question: Can you describe the addressable market on the network marketing side and the sales cycle on average to sign up customers.
Answer: (Rory) In respect to the addressable market on a global scale, there are a little over 100,000,000 million people involved in direct sales space. So, it is a large, large, large industry and we right now have a small percentage of that, so there is enormous, enormous opportunity for growth. And as I said, and I described we have the “killer application” for that space. We have every reason to believe that our market share will grow. By the way, none of the other ‘big players” are in this space. So, we will very quickly become the dominant player, if we are not already now and then continuing to grow.
Question: You are selling to a network marketer and how are they seeing a ROI and sales cycle?
Answer: (Rory) The see ROI almost immediately. With regards to the sales cycle, it varies. If we were starting today, then we wouldn’t expect to see revenues from a new network marketing company or new prospect for sometimes as much as six to seven months. There is still configuration time, these are white label products for large enterprises where we are bringing on tens of thousands of users at a time. But because we just didn’t start today, we have a robust pipeline of these deals already closed. So, we don’t have to wait several months to see revenues. You will see it now in Q2, Q3 and Q4 with the deals that we have signed already and continue to sign and just keep rolling.
Quesiton: On the large CRM platforms that you have been working with, when do you see that they will start offering your technology and as a result, I would assume that to be a revenue generation from those businesses and maybe talk about the timing of that and how that is going?
Answer: (Rory) Its going pretty well. We have the product in testing, it is a brand new, very sophisticated, but yet super simple product to use. We re-designed it and brought in people from Apple and Snapchat to help design it and make sure that it was cutting edge, user friendly, fun to use features especially on the analytics side. When testing is finished, and were probably another several weeks away, then we will begin the integrations, that will take us a good couple of months minimum and then we will see it deployed. Now, internally we have great expectations for what we expect to see there, but if we are to look at our projections this year, we are only expecting only 5% of our revenue to come from that. Circumstancially more in 2020, but as we get that product out, we will keep everyone up to date. We are looking at it very, very conservatively because what we are looking to do is make sure that we very much under promise and very much over deliver.
Question: Can you provide a breakdown of the traditional side of the S.C./Verb business compared to the digital side and what those trends are looking like from Q1 2018 to Q1 2019?
Answer: (Jeff Clayborne) We are not pushing the tradition side but focused on the digital side. We did see an increase of 47% Q1 last year to this year primarily due to corporate kits and samples. The biggest driver to this and why this is exciting to us, is because this dramatic increase is directly related or driven from our app itself and because of increased users these apps. (Rory added) The app is that effective and is why we are seeing these results. If you’re a salesperson working for a direct sales business, one of the most effective ways of creating new customers is to give your new prospects that you meet a sample of what you are selling. When you are able to do that, they data shows is that your conversion rates/sales go up rather dramatically. What we have built into the app. Is the ability for the user on their cell phone with a couple of button presses arrange to have a sample sent to that person. Then this activates a drip campaign of interactive videos. This starts when that person receives the sample because you get notified immediately by the way Verb coded and configured the app with delivery. And that drives business. It increases conversion rates like nothing else out in the market. This will work with any business that has something to sell, not just network marketing companies. When more people see this, see the results, we expect to see monumental growth, and nobody has “this”. I don’t want to play down the power of that sampling through the app.
Question: Can you explain the growth on the digital side, I assume it’s the network marketing companies?
Answer: (Jeff Clayborne) Yes, that is correct.
Question: As we think about 2019 and the remaining 3 quarters in the trajectory and given all the capitol you have now and the increased focus on digital now, how should we think about the growth rates?
Answer: (Rory) If you look at the growth of the digital business over last quarter, it was actually 40% increase. That is when we combined the platform and began selling as a joint team. I do expect that rate to continue. By the way, that platform was not completed until sometime in January 2019, so when we start seeing full quarters of our combined team working, and the marketing plans that we have now initiated, yeah, I believe we have every reason to believe that, that growth is going to continue and accelerate.
Question: Is that growth of 40% year over year or sequentially?
Answer: (Rory) That is 40% growth over last quarter… sequentially.
Question: Can you describe the addressable market on the network marketing side and the sales cycle on average to sign up customers.
Answer: (Rory) In respect to the addressable market on a global scale, there are a little over 100,000,000 million people involved in direct sales space. So, it is a large, large, large industry and we right now have a small percentage of that, so there is enormous, enormous opportunity for growth. And as I said, and I described we have the “killer application” for that space. We have every reason to believe that our market share will grow. By the way, none of the other ‘big players” are in this space. So, we will very quickly become the dominant player, if we are not already now and then continuing to grow.
Question: You are selling to a network marketer and how are they seeing a ROI and sales cycle?
Answer: (Rory) The see ROI almost immediately. With regards to the sales cycle, it varies. If we were starting today, then we wouldn’t expect to see revenues from a new network marketing company or new prospect for sometimes as much as six to seven months. There is still configuration time, these are white label products for large enterprises where we are bringing on tens of thousands of users at a time. But because we just didn’t start today, we have a robust pipeline of these deals already closed. So, we don’t have to wait several months to see revenues. You will see it now in Q2, Q3 and Q4 with the deals that we have signed already and continue to sign and just keep rolling.
Quesiton: On the large CRM platforms that you have been working with, when do you see that they will start offering your technology and as a result, I would assume that to be a revenue generation from those businesses and maybe talk about the timing of that and how that is going?
Answer: (Rory) Its going pretty well. We have the product in testing, it is a brand new, very sophisticated, but yet super simple product to use. We re-designed it and brought in people from Apple and Snapchat to help design it and make sure that it was cutting edge, user friendly, fun to use features especially on the analytics side. When testing is finished, and were probably another several weeks away, then we will begin the integrations, that will take us a good couple of months minimum and then we will see it deployed. Now, internally we have great expectations for what we expect to see there, but if we are to look at our projections this year, we are only expecting only 5% of our revenue to come from that. Circumstancially more in 2020, but as we get that product out, we will keep everyone up to date. We are looking at it very, very conservatively because what we are looking to do is make sure that we very much under promise and very much over deliver.
32
