Metrics that Measure Up

Sam Baker, Principal at Scale Venture Partners, has been a venture capitalist for six years. Before that, he gained operational experience at Box in both an Inside Sales role and in a Strategy and Planning role.Scale's culture has a very quantitative-oriented DNA, including having its own benchmarking organization known as Scale Studio. Benchmarking delivers reality to every Scale portfolio company and aligns the founder and the investor on a metrics-oriented approach to decision making.The first topic we approached was what metrics are most important to a Series A and Series B investor? Sam's initial response was not to rattle off a list of metrics but to discuss the importance of "context" in today's investment environment. As an example, Sam shared that the "maturity" of the company is a primary driver of how best to use metrics.Scale has identified and uses four (4) Vital Signs of SaaS that include: 1) Growth; 2)Efficiency; 3) Churn, and; 4)Burn. A small description of the four vital signs below:Growth - How quickly is revenue growingEfficiency - Quantity of revenue compared to Sales and Marketing spendChurn - Do customers stick around and buy more, OR do they leaveBurn - What is the rate of cash consumption to grow a SaaS companyWhen asked about a benchmarking framework that Scale uses - he first highlighted it depends on who is consuming the benchmarks (which role) and what is the stage and maturity of the company. Scale's benchmarking framework is very extensible to enable an increased aperture on the metrics being utilized. For example, when a company dramatically increases investment in Sales and Marketing, Customer Acquisition Cost efficiency metrics become more important.Next, Sam recommended avoiding benchmarking and metrics overload, which requires a company to identify the most important and most informative metrics to how the company is currently trending and will be trending in the near term. Moreover, be prepared to add or change metrics that are most relevant to the growth stage.Scale has a couple of unique metrics, including Instantaneous Compound Annual Growth Rate (iCAGR). The benefit of iCAGR is it provides a real-time and is most sensitive to growth or shrinkage today, versus being biased by the average effect of quarterly or annually metrics. As an example, if growth is down in the most recent quarter, but the previous three quarters had higher than normal growth it can identify potential risk or new trend in company performance.Another metric that Scale uses is "Growth Persistence" which investors use to measure the rate of growth over time. For example, if a company grows 100% one year, and then 85% in year two and 72% in year three, it would reflect an 85% median growth persistence.How to avoid "metrics overload"? This is especially important in board meetings when the "metrics creep" can often happen. First, make sure everyone knows the company's "North Star" and how each metric directly impacts the North Star. Second, gain agreement up-front with the investors and board members on those metrics that are most important, that they are presented in a manner that is easy to understand and ensure the metrics tie back to the source systems being used.Sam provides a very insightful and instructive perspective on using metrics and benchmarks to inform a SaaS company's growth journey - especially from an investor's perspective, which is so critical in the 2022 investment environment.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Everyone talks about the "Customer Journey" but often operates in stage-by-stage silos of customer acquisition, retention, and expansion.What is the Customer Journey - first, it often depends on if you come from a "Buyer perspective" versus the "Seller perspective." Ultimately, the seller is trying to figure out how to turn the buyer's meandering journey into a more liner, faster buying journey...sounds like an adversarial relationship using this model.One interesting aspect of today's buying journey is how to optimize how Marketing, Sales, and Customer Success collaborate across the customer journey. The early phase can feel disjointed to the customer as they engage with a vendor using multiple "marketing-led" experiences that are not well understood by the Sales Development and/or Sales resource, who often do not know the knowledge and experience the prospect already has from self-directed research.Does having shared goals and metrics across Marketing, Sales and Customer Success impact the customer experience? Having an "Account Energy Score" may assist in aligning the functions across the customer journey. It can also inform the probability of a prospect becoming a customer. The Account Energy score factors in signals at each stage of the journey and weight specific actions such as content engagement or activities based upon the stage of the journey, such as Customer Acquisition vs Customer Retention vs Customer Expansion.Though there is never a "magic bullet" that can guarantee a prospect becoming a customer, being able to dynamically score each point of engagement depending on the latest understanding of how each signal correlates to customer journey progress is a material increase in insights versus today's standard models.In the "tough question category," is it the seller's responsibility to follow the buyer's journey OR to try and help guide and lead the prospect to make the best purchase decision? Carson's perspective is it is better to lead the buyer through the process by understanding the buyer's actual needs and being willing to stop the process IF their solution is not in the best for the buyer.Another key point is there is NO single customer journey or buying process, so it's critical to always be listening to the prospect and align plus help guide the buyer through the process.In today's "land, retain and expand" customer lifecycle process in the SaaS industry, having a 360 degree view that is informed by every signal that impacts the customer journey is a best practice. It is also a best practice that requires tight integration of your Marketing, Sales, and Customer Success team aligned to the customer journey.If you are interested in learning more about today's customer journey, and how to use their engagement as input to your forecast, and to better inform your internal resources on the best next action, this conversation with Carson is highly informative.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Taft Love's journey to becoming a Revenue Operations leader started in law enforcement, with a pivot to starting his tech career by becoming a Sales Development Representative, on to direct sales, sales leadership and ultimately to Revenue Operations.This journey is exactly the cross-functional experience that builds a strong foundation to being a strategic revenue operations leader.  Interestingly, Taft's experience as a sales lead at early stage B2B SaaS company, PandaDoc by identifying and then having to solve operational challenges that impacted his productivity.When should a company consider a RevOps function?  Taft's perspective is that RevOps starts with ensuring the revenue technology platforms and processes are aligned and optimized to the need of the front line sales personnel.  Simply stated, start the RevOps journey with a RevTech resource and as you grow to $5M - $15M (Series B) start considering a RevOps team that has broader responsibility beyond managing revenue technology platforms.As we discussed the RevOps framework of data, platform, process and analytics Taft doubled down on the "rev tech stack" administration is the initial catalyst to creating a RevOps team.  When pressed on the traditional approach to bringing in a Salesforce administrator and then the marketing automation administrator - often positioned as a Sales Ops and Marketing Ops resource, Taft continued to support his belief that RevOps should not be the first ops resource brought into a company.Next we discussed the pro's and con's of starting the RevOps journey with an internal hire versus leveraging the expertise of a RevOps agency.  Taft's insights are that no one single RevOps resource can be good at every component of a RevOps function.  Examples include trying to have the same single resource be a platform administrator, data guru, business analyst and technical integration expert.Taft's recommendation is to bring in a RevOps leader, who is the RevOps architect and also work with an agency that can bring the right experience and expertise on an "as needed" basis.Next we discussed why Sales Development can benefit the most from a close partnership with Revenue Operations.  Sales Development productivity is directly impacted by having the right "target prospect" data, the ability to conduct high quality outreach at scale and ultimately being able to fuel the engine of company growth - pipeline development!Recent research has shown that only 49% of an SDR's time is spent on outbound prospecting because they spend the majority of their time on administrative and operational activities, such as data management, list development and contact enrichment, that are the primary domains of a Revenue Operations function.If you are considering an investment in your first Revenue Operations function or how to leverage your Revenue Operations team to increase revenue activity productivity, Taft is a great listen.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

SaaS Capital - I have always loved that name and followed their B2B SaaS Research for many years.Todd Gardner was a founder at SaaS Capital, which helped lead the early days of "Debt Lending" for SaaS companies. Most recently, Todd is now the principal at SaaS Advisors assisting both SaaS companies and SaaS investors during the financing process.During Todd's career, he has reviewed thousands of SaaS income statements and balance sheets which positions Todd very well for the business and financial impact of Usage-Based Pricing (UBP) for B2B SaaS companies.The first topic we discussed was "What is Usage-Based Pricing"? The concept is pretty basic, aligning pricing to the value received by the customer. This concept has been used in other consumption-based industries, such as gas, water, and cellular phone bills.How does UBP impact the traditional use of subscriptions? Approximately 50% of SaaS companies using a Usage-Based pricing model also include an annual subscription as part of the pricing structure....a hybrid model. One interesting aspect when using a UBP + Subscription model is what is included in the subscription versus being purely usage-based charges?One of the challenges of a Usage-Based Pricing model is the increased challenge of revenue forecasting - which was one of the benefits of the traditional SaaS subscription model. Todd highlighted there is a trade-off in pricing between simplicity and value alignment. By having a hybrid Usage-Based Pricing model, there can still be the predictability of the subscription model while still having the opportunity to increase revenue as value increases for the customer.Is there a history of Usage-Based Pricing in a software subscription model? In the spirit of all things being circular, the original use of UBP was in time-sharing, which was a popular software application usage model in the 1980s. One of the challenges in that phase of subscription software was once usage increased to make the monthly cost-prohibitive or after a couple of unexpected large invoices from higher than normal/expected charges. Todd highlighted that with the introduction of the Customer Success organization, coupled with the use of product analytics, a SaaS vendor can stay in front of sustained "larger than expected" invoices and even use increased usage to re-structure the agreement to either "cap" overage usage and/or decrease the per-unit cost in consideration of a larger commitment.Todd recently conducted research that identified 6 product attributes or leverage points that suggest considering a Usage-Based Pricing model:1. Lower in the technology stack products (infrastructure, databases, tools, platforms, etc.)2. Application products that have a high Cost of Goods Sold basis 3. Use of the product is directly linked to business value (payments, eCommerce)4. Self-provisioning products (think Product-Led Growth)5. Growth and intensity of usage (high growth, heavy usage-based products)6. Value is driven by automation - such as integration/API based productsTodd has a unique perspective on the SaaS industry, informed by reviewing and lending to 1,000's of SaaS companies, and his recent research on Usage-Based Pricing across the SaaS industry is the basis for an information-packed conversation.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Kyle Porter, the founder and CEO of Salesloft, started the company over ten years ago. The goal was to have sellers "loved by the customers" they serve.An initial observation was that it was difficult to deliver a personalized customer engagement experience at scale, thus the catalyst for Saleloft and the Sales Engagement category.The future of Sales Engagement? All professionals who are responsible for driving revenue will be able to log into a single system, have a pre-defined queue of activities that is populated and prioritized automatically by the platform, automation to assist in executing those activities and measure the success of those activities...all while using the activity success to learn over time.The ultimate result, eliminate the subjective approach to prioritizing activities while increasing operational efficiency by automating a majority of those activities.Why has Sales Engagement traditionally been a tool for Sales Development, and will its use be expanded to other Go-To-Market roles? Originally it was easier to "codify" the SDR role because is was such a new role. Going forward, using machine learning and AI, Sales Engagement utilization will quickly evolve in the Account Management and Customer Success functions.One of the most significant challenges that Sales Engagement Platforms have addressed is the amount of time an outbound sales resource actually invests in outbound prospecting. Recent research says that Sales Development Representatives are currently only spending 49% of their time on outbound prospecting. Increased utilization + enhanced functionality in Sales Engagement Platforms will reduce the time invested in manual, internally facing tasks.Can a Sales Engagement Platform impact the middle of an opportunity funnel? Kyle's vision highlighted a "post-loss" cadence as one example of how a Sales Engagement Platform is used at the bottom of the funnel to inform future opportunity management. Another example was a post won communication cadence from the CEO to new clients.Customer Success is a critical, high-value function in the B2B SaaS industry - how can a Customer Success Manager use a Sales Engagement Platform? One example was using product analytics, such as an account engagement or usage, and using specific signals to launch an email to assist users in an automated sequence.How to measure the return on investment on Sales Development? Kyle's perspective is that moving the goal beyond scheduling a single meeting as the primary objective, such as scheduling 10 meetings in a large strategic account to gather information that can be used by the strategic account AE to schedule a meeting with an executive based upon the discovery information the SDR gathered across multiple meetings.One of the key benefits of a Sales Engagement Platform goes beyond a single user but to a team-based outreach program across two or more resources, such as the SDR + AE.We closed the conversation with Kyle on the key challenges and obstacles that Salesloft faced in becoming a leader in the Sales Engagement Platform category. The one that Kyle focused on was the need to develop his leadership skills. "Learn faster than the rate of my own experience" was a phrase Kyle used to become a continuous learner and not be limited by negative labels - such as "he's a $1M - $10M ARR CEO". Kyle uses 360-degree reviews as one strategy to learn from his company where he needs to grow. Other tactics Kyle uses to fuel his continuous learning are forums with other CEOs, having a CEO coach, and reading.If you are using a Sales Engagement platform or want to learn from someone who has scaled to $100M ARR+, Kyle Porter is a great follow and listen!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Great Resignation has been a trending topic for six months - how does a B2B SaaS company prepare for  the impact? Sales Enablement is one strategic function that will be a key component to combat attrition and ramp new sales hires to productivity...quicklyDave Lichtman has been a sales trainer, a sales professional at Salesforce and a sales leader at Sales Enablement platform vendor, SalesHood.We first discussed how Sales Enablement evolved during the pandemic.  First, most sales playbooks had to be thrown out the door, and companies had to re-train and enable a new "virtual sales process" and Sales Enablement was front and center to that new reality.Dave has seen compensation packages rise dramatically due to the increased need, and many Sales Enablement professionals are seeing total comp packages in the range of a Senior Director or VP Sales.When to first deploy a Sales Enablement function?  First, ensuring Product Market Fit and having an initial repeatable sales process need to be established.  Once that happens, it is good to invest in Sales Enablement to scale sales....revenue level is secondary to ensuring these two factors are solid.How has the delivery model changed for Sales Enablement?  The common foundation was ensuring you could train new sales hires virtually,  thus requiring a more robust technology, including a sales enablement platform.  Another key trend due to the current levels of sales personnel attrition is ingesting larger groups of new hires simultaneously, which requires a more compressed time to productivity.Sales Enablement today is aggressively using a hybrid of virtual, instructor led + digital self-directed learning. So what is the "profile" most in demand for Sales Enablement resources today?  Dave shared the top "attributes and experiences" including:  1) Direct sale experience is a plus but not a must...what is a must is being a student of sales. 2) Typically, the first hire is a "team of one" and having previous Sales Enablement experience in standing up the first Sales Enablement team is a critical, must have skill set.  Being a Sales Enablement employee is a larger organization is not applicable to standing up a Sales Enablement function. 3) Curiosity is probably the most important personal attribute, while being a "pleaser" who thrives on helping people WHILE also having the ability to gently push back on leadership when a requested direction may be sub optimal.  This can lead to taking on too many responsibilities ultimately leading to failure.Sales Enablement is a team sport, and as such being able to build strong relationships across functions is critical to sustained success.  Has Sales Enablement evolved beyond sales, and expanding to functions such as Sales Development, Customer Success and Account Management?  A minority of companies have started to expand Sales Enablement to include post sales resources, though the C-Suite has started to view Sales Enablement as a strategic function, and broadening the purview of Sales Enablement.Dave sees Sales Enablement primarily living under and reporting directly to the Chief Revenue Officer.  This will enhance alignment of Sales Enablement to the strategic priorities of the CRO - in Dave's team closer to the sun is an important key to Sales Enablement success.How to measure the ROI of Sales Enablement?  Measure both leading and lagging indicators.  Start with the purpose of each program and align to leading indicators such as close rate, competitive win rate, discount rates, ACV, etc,If you are a Sales Enablement professional, thinking about investing in Sales Enablement for the first time or simply looking on best practices to increase Sales Enablement impact on revenue,  the discussion with Dave Lichtman is highly instructive.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Anna Baird is the Chief Revenue Officer at Outreach, the leading Sales Engagement Platform.  Anna started her career as a partner at KPMG, and continued her career journey across multiple “C-Level” roles including CFO, COO, President and now CRO.The first portion of our conversation centered on the maturity of the Sales Engagement Platform category.  Anna shared that across all B2B Sales, that the category has only achieved a 2% market penetration, as measured by the number of B2B sales professionals.What started as a point solution for Sales Development, top of funnel prospecting tool, Sales Engagement has now evolved from the B2B Tech industry as an entry point to how do you impact the entire Go-To-Market team across the entire customer journey.Research shows that 51% of B2B SaaS companies have invested in a Sales Engagement platform.  Anna sees the expansion opportunity for Sales Engagement to be both across every Go-To-Market function and across multiple new industries beyond the technology industry.  By automating the workflow associated with every point of customer engagement across the customer journey, data capture into the core Customer Relationship Management (CRM) system of record. Expansion revenue is becoming a larger component of ARR growth in the B2B SaaS industry. As a result, the Customer Success function is becoming a more prominent user of Sales Engagement, to manage expansion and renewals at scale. Anna’s vision is that Outreach becomes the primary dashboard that any GTM professional enters and lives their day, including highlighting the highest priority activities and tasks for the day - using predictive, revenue intelligence within the platform.  IIn fact, the vision is much larger, because the pain that exists goes far beyond tactical activities, it’s how to view every customer engagement point is available in a single, integrated platform.  In fact, Outreach is expanding their category name to the “Sales Execution Platform” - going beyond engagement to execution across the entire customer lifecycle.Anna’s vision evolves Outreach into a “System of Execution” which is more about customer process execution versus a datastore of customer information.Next, we pivoted to how revenue leaders can leverage “metrics and revenue intelligence” to make better decisions. By aggregating all customer conversations into a single environment, it becomes easier to apply revenue intelligence to all of the signals from customer engagement points to prioritize which signals are of highest priority.Anna also shared her perspective on the importance and priority of Revenue Operations. Anna, calls the role “Revenue Excellence and Operations”. This role is responsible for both the strategy and then the execution of revenue processes. Having Revenue Operations being responsible for the operations and administration of processes + the platforms drive revenue performance.  In fact, the head of REO at Outreach is intimately involved in almost every strategic, revenue centric company level discussion.Anna provides a highly strategic and insightful perspective on how technology is critical to enhancing Revenue Execution across every B2B Go-To-Market organization.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Customer Success has been growing in importance across the B2B SaaS landscape for over 10 years.Guy Nirpaz recognized this trend early on and founded Totango in 2010 to deliver a SaaS platform to empower Customer Success (CS) professionals to focus the company around the customer.Guy stated our conversation with his belief that Customer Success is a company strategy - not just a department.  If you want a customer to renew and expand their relationship, every interaction with the customer needs to deliver value and deliver upon the promise the relationship began upon.Business outcomes should be the #1 focus of the CS organization.  But how to ensure the executive/economic buyer(s) understand the value you are delivering?  First,  track all of the users in your account by role and engage as required to ensure all stakeholders are using your product and receiving value.How does Net Promoter Score (NPS) help to understand customer satisfaction?  NPS  is only one tactic to measure customer satisfaction.  But with only 10% - 20% of target participants completing the NPS survey, ensure you are using other tactics, such as user activity and other metrics that impact customer satisfaction.A key variable that leads to customer retention or churn, is to ensure you are tracking the satisfaction of executive buyers and also track customer executive movement from and to your customers which can directly lead to customer retention challenges.Next we discussed how Quarterly Business Reviews (QBRs) should be used to manage customer satisfaction and increase customer retention.  First, establish a regular cadence. Second,  include executives for the appropriate portions of the QBR.  Thirdly, ensure an agenda is  approved by the customer prior to the QBR to ensure you cover topics critical to the customer. The pre-approved agenda is an example of having clear communications to increase the quality of every in-person interaction.Value delivery was discussed in context of QBRs to confirm the business value being delivered is part of the QBR.  The first requirement is to KNOW why the customer invested in your product.  This requires the vendor to capture the business value the customer had used to justify the investment.  This requires a well defined process that identifies, captures and then uses that business objective in every QBR.Value Engineering is one organizational approach to capture and highlight business outcomes. By having this function ( capability) in place, a company materially increases the ability to engage executive in the sales process, and the QBR process.  If an executive buyer was involved in confirming and owning the business outcomes of an investment, they are more vested in attending a QBR that includes the progress being made against the "outcomes" that justified the investment.QBRs are one approach to highlighting value. Executive Business Reviews (EBR) is another approach to engage economic buyers in a QBR.  One approach is to automate and share the "usage"  data prior to the QBR and focus the majority of the customer briefing on the value and outcomes.A common mistake in QBRs is not using the session to review each page in the QBR report/presentation. Provide the report in advance, and focus the QBR on discussing  business value and focus on how incremental value can be delivered.To increase the value of QBRs,  delivery should be viewed as a high value event that is measured by the value the customer receives as measured by retention and expansion.  One approach is to run a Customer Satisfaction survey to receive customer feedback on the value of the QBR.This conversation is a great listen for anyone involved in Customer Success and using QBRs.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

We apologize for the sound quality on this episode of the Metrics that Measure Up.Bill was not able to participate on our traditional digital channel medium and instead we relied upon the traditional "analog phone line". This traditional approach created a little "reverberation and noise".  Bill shares so many great insights developed over his 37 years of being a Silicon Valley Venture Capitalist and his multiple best selling books in this conversation, we decided to go ahead and publish the episode - including the harsh reality of analogy technology!Bill recently published his latest book - The Autonomous Revolution which provides a very unique insight into how technology is fundamentally changing many of the social and economic constructs of the U.S. and global economy.What is different now is that technology today is changing multiple structures our society has not seen changed since the industrial revolution.  One simple example of this is that companies like Amazon and Google generating >$1M of revenue per employee which had remained essentially flat throughout the 20th century.Another topic we touched upon is the contribution of social media's presence to the increasing polarization of society, and the impact of geo-political reality across the globe.The internet and social media has reduced the cost of "one to many" communications by a factor by a massive amount.  Traditionally, the free market economy controlled free speech, but today the cost of communicating to millions of people is basically zero and fundamentally changes how one individual can reach, influence and inspire people across the globe.If you enjoy taking a few minutes outside of your day to day reality, and reflect upon how technology has and will affect our society, our economy and our future reality - this conversation with Bill is a true thought provoking conversation.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

One of the great aspects of the Cloud software delivery model is the generation of insightful data generated by users and the purported ease of using the data to better inform  decision-making.At the same time, the amount of data being generated in the Cloud makes the job of normalizing, analyzing, and determining what data is truly informative and predictive versus just adding noise and complexity to the system.Adam Wilson, CEO at Trifacta was purchased by Alteryx after this podcast was recorded.  Adam shares his insights in building awareness and a company that takes on the growing challenges of managing and using data generated in the cloud.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.