Metrics that Measure Up

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.

Rachel Parrinello, an expert at The Alexander Group specializing in pricing strategies, dives into the fascinating world of usage-based pricing models in the B2B SaaS industry. She discusses the evolution of sales compensation, emphasizing the need for plans that incentivize customer engagement stages. Rachel introduces the ILAER model to highlight how to align sales incentives with organizational goals. She also touches on hybrid sales roles and the complexities of motivating teams while retaining customer relationships. A riveting talk on modern sales strategies!

B2B SaaS founders envision their entrepreneurial journey including a liquidity event such as an IPO, a financial acquisition, or a strategic acquisition from an industry leader.Lowell Ricklefs has deep operating experience leading tech companies and has experienced acquisitions on both the buyer and the seller side multiple times. During these processes, Lowell often wondered why banks were required to sell a SaaS company.Lowell identified an opportunity for enhanced sell-side assistance for SaaS companies in the $3M - $20M ARR range.The first topic we cover is the personal decision of deciding to sell your company and the signs that suggest maybe this is the time to consider selling. One sign is the journey has been very long and arduous and the founder is tired, does not have any new breakout ideas, and is ready to exit.  Another sign is when a market segment becomes very hot, the competition is fierce and larger companies have started to enter as competitors. One threshold that Lowell suggests is critical to optimizing company value is reaching at least $5M - $10M ARR will materially increase both the interest and value that your SaaS company will receive. A consideration that a founder needs to be fully explored is if they are truly ready to step away from being the day-to-day leader of the business.  Often, especially in strategic acquisitions, the founder who has been the CEO for years will most likely be asked to take a reduced role within a larger organization.  Some founders can find this very comfortable, but often it can become a struggle when the ultimate decisions will not be their own.Strategic acquirers typically will be looking for a company with at least $10M ARR.  At a macro level, Growth and Retention metrics are the most important metrics that a strategic acquirer will evaluate.  Net Revenue Retention, logo churn, revenue concentration, total addressable market, and EBITDA are important to strategic acquirers.  Another metric that strategic acquirers consider is the amount of capital raised or consumed, as strategic acquirers do appreciate and value the company's ability to grow efficiently.Our host, Ray asked Lowell the question for a $10M ARR company which is more important to an acquirer - Growth Rate or Net Dollar Retention?  Lowell said both are important, but one that can grow organically as measured by Net Dollar Retention is his choice for the most important company value impacting metric...at $10M  ARR and above.An early-stage company will not be valued based upon the level of profitability by a strategic buyer, but Lowell still recommends having a plan to become EBITDA positive, and growing that profitability is a critical metric.One consideration for strategic acquirers, especially Private Equity (PE) is if your company will become a "PLATFORM" for industry consolidation.   There are several PE firms that have a thesis of consolidating the industry, growing through acquisition, and eliminating duplicate SG&A costs leading to increased profitability.  In this scenario, having great organic and profitable growth is foundational to the company becoming the platform for consolidation and growth."PLATFORM" - what does this mean in strategic acquisition?  For Private Equity - it is the company that becomes the centerpiece of a consolidation strategy. $10M ARR is really the threshold to be considered as the platform for a strategic consolidation strategy.  Many PE companies also use the available market size as a criterion for using a consolidation strategy - but many also will focus primarily on Internal Rate of Return (IRR) as the primary criteria.If you see an acquisition for your SaaS company as a potential outcome, the conversation with Lowell 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.

Andy Byrne is the founder and CEO of Clari, an enterprise artificial intelligence B2B SaaS platform that enables companies to build more pipeline, accelerate revenue growth and increase revenue predictability.Andy has a long-term relationship with machine learning from his previous company  Clearwell Systems (acquired by Symantec), and that experience was the foundation of his vision for Clari.  Andy identified that machine learning had not previously been used to help sales teams close deals faster, assist managers to accelerate revenue velocity, and enable executives to gain enhanced visibility into revenue forecasts.The first topic we covered was the definition of Revenue Operations? Andy defined it as the people, the process, and the technology that drives a company's revenue engine and orchestrates sales, marketing, and post-sales activity.Do we need another piece of technology to automate the revenue process?  Andy highlighted that his customers are demanding a better way to align, integrate and orchestrate every step and point of engagement with the customer journey.  Andy highlighted that with the rise of the Chief Revenue Officer (CRO), there is a real movement to re-engineer go-to-market processes and even organizational structures.When asked about the CRO having both marketing and sales, Andy highlighted that the CMO is traditionally responsible for pipeline, brand, and product marketing.  If you think about those three areas, the #1 priority is pipeline which creates an intimate connection between a CRO and CMO.  Moreover, since the CMO also owns brand,  it makes more sense for the CRO and CMO to be co-equal peers, and not worry about who reports to who.Clari actually integrated demand generation and Sales Development into one integrated organization.  Andy highlighted that took that integration one step further, but also creating a Value Engineering group into the same organization with the specific responsibility to measure and share the return on investment for their customers.Value engineering is a combination of art and science, to prove the mathematical results of using your technology or platform using empirical evidence versus ad-hoc, anectodal stories.  This approach to highlight the value received has led to the expansion of the Clari platform beyond sales, to both Marketing and Customer Success.  In fact,  the post-sales motion focused on up-sells and cross-sells directly increases Net Dollar Retention Rate is has been key to the increased acceleration of the Clari growth story.Revenue Intelligence is a "buzz phrase" that is being tossed around the B2B SaaS industry.  Revenue Intelligence is the ability to gain insights into communications and transactions with the target buyers and customers. A key term Andy highlighted was "signals" are coming from multiple sources - typically transactional systems like conversational intelligence, sales engagement, and even CRM platforms.  By aggregating all of these signals into one "system", the ability to surface key insight nuggets materially increases the visibility for executives to make better decisions and increase revenue forecast accuracy.If you are involved in a B2B company that is growing quickly, and needs to drive revenue across customer acquisition, retention, and expansion motions, listening to Andy's insights and experiences gained from hundreds of Clari customers, this is a great conversation that provides several "information nuggets" that can quickly be leveraged to accelerate predictable revenue growth.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Benchmarks go far beyond the “numbers” and “metrics”Benchmarking is a discipline that enables organizations to identify processes and best practices that companies inside and outside of your industry to become best in class in a specific discipline.Scott Sutton is the VP, Revenue Operations at ZoomInfo and shares his experiences in building the Revenue Operations function.Scott’s initial career experience was in the automotive industry and provided a solid foundation for his transition into B2B SaaS.  Operations have traditionally been a second order of priority in the B2B SaaS industry.  When Scott joined ZoomInfo, he highlighted that they were already a very “data-driven” company, but he was able to bring his deep and broad operational process skills developed at Daimler.Scott quickly learned that process analysis methods, like queue theory, were highly transferable to the customer acquisition processes at ZoomInfo.   The revenue process is at the core of everything that Revenue Operations has responsibility.  Using a project + process thinking framework, every challenge can be isolated, analyzed, and resolved across the company. Individual contributors, such as sales development or Customer Success Managers are key sources of process feedback and input.  By “walking the floor”, the RevOps team remains aligned to understand their experience in executing the processes they design and refine. Two years ago, ZoomInfo deployed product managers for each function within sales.  They are the primary resource responsible for shadowing resources in that function and identifying process improvement opportunities for the function and processes.The Performance Management Framework builds upon the concepts of the AOR framework.  Activity metrics are readily available to the front line every day.  ZoomInfo conducts weekly forecasting, customer experience, pipeline growth including daily pacing which directly feeds into the monthly operating review. How important are activity metrics to the framework?  Activity matters, even though individuals can be an exception to the activity supply chain, having activity goals are critical to forecasting the level of inputs required to deliver outcomes as measured by pipeline and revenue. “Activity Score” is a unique measurement that ZoomInfo uses. The algorithm weights every type of communication measured by engagement level, and then is cross-referenced by the target market. The input signals are continuously evolving, so the Activity Score is dynamic and will reset based upon a longer than normal lack of signals.  The activity score normalizes for each target market segment and automatically scales up or down based upon market segment.Benchmarking goes far beyond the numbers, but best-in-class companies can learn from other industries that have best practices in a process that you have targeted for improvement.  One example was how best-in-class companies improve internal system administration. With 20+ sales tech developers, he wanted to benchmark how world-class companies managed software development and administration, and how they could improve based upon classic software development benchmarks.ZoomInfo measures RevOps impacts company metrics, by focusing on metrics such as ACV per rep or how much investment is allocated to new versus expansion revenue. Another example is CLTV to CAC Ratio, as it helps inform how to balance the “land and expand” model by evaluating initial contract value versus Customer Lifetime Value after multiple years of up-sells and cross-sells.If you are responsible for Revenue Operations or have a responsibility on how to use data generated from multiple market-facing technologies, Scott’s experience and insights make for a highly informative discussion.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Sam Jacobs first created the foundation for Pavilion - formerly the Revenue Collective in 2016. The vision was to address these two trends: 1) the average tenure of executives at B2B start-ups was shrinking - about 17 months for revenue leaders; 2) The job of being a B2B executive continues to grow in complexity and difficulty. Sam was experiencing this phenomenon in his career and wanted to create a platform and community to share best practices and assist members in realizing the potential that lies within themselves!Before Covid - Pavilion primarily used the format of in-person events. During Covid, the pressures on sales professionals did not decrease, while the ability to speak with fellow professionals became more difficult. Pavilion saw an increase from 800 members to over 3,700 members in 2020. In 2021, the number of members has increased to over 6,500 members by November 2021.The vision for Pavilion has evolved since 2016. When first launched, the Revenue Collective was more of an "us versus them" orientation and the community was only for B2B Sales professionals. That vision has evolved to help professionals reach their full potential across multiple functions. Today, the community supports Sales, Revenue Operations, Customer Success, Finance, and most recently, a CEO community was launched. The Pavilion vision does not end in the B2B tech industry but will continue to evolve across multiple industries. Pavilion is a "paid" membership community. Thus the customer is the member, and that creates a different set of expectations of the community and thus, the focus of Pavilion is to serve the member - not other stakeholders. As an example, Pavilion personally calls every new member to welcome them to highlight their focus on the members. Though there are many other B2B communities, Pavilion's reason to exist is not concepts such as "elevate the profession of sales" - the community is to achieve the goal to enable members to unlock their potential and have the career success they desire.A core value of Pavilion is "Get by Giving." This goal is to create a community ethos that is more about helping other people, which pays itself back many times over. Another value of Pavilion is to "Listen Closely and Act Quickly". Listening closely means understanding what the member really needs and not glossing over their words - but digging into the underlying meaning and goal of the words spoken. Another core Pavilion value is "We choose to come from Kindness" - which is a message to the world. This ethos is highly personal to Sam and begins with acting with compassion, human empathy, kindness, and even affection for those in your community - while still building a great business.What metrics does a community capture to measure its health? Retention rates are a critical measurement, and best-in-class consumer companies are experiencing 2% member churn per month. But that is not the whole story, the corporate client (Pavilion for teams) is a key to Pavilion's growth, and they have a Net Promoter Score of 56 - which translates to 71% of corporate customers love what they are receiving. Pavilion University is a key component to drive member value and thus retention. This offering is receiving positive member feedback with an NPS of 91!A top goal of Pavilion for CEOs is to reduce the loneliness of being a CEO. The three areas of focus include:Tactical skill knowledge - like finance, sales, HR, technology, etc.Personal leadership development.FUN - because everyone needs more fun in their lives - especially in such high pressure and stressful jobs.Sam's heartfelt goal to build a human first community provides a thought-provoking and highly informative discussion.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Are you involved, responsible for, or dependant on Sales Development and pipeline growth for a B2B SaaS or Cloud company?If you answer yes to any of the above, this is an excellent conversation to gain new insights and hear innovative approaches to maximize pipeline development.Kyle Coleman is the Vice President, Revenue Growth and Enablement at Clari. This role includes sales development, sales enablement, and demand generation at Clari. This integrated approach to pipeline development is unique in the B2B SaaS industry.Kyle highlighted that having enablement as part of the same function ensures the messaging and campaigns that demand generation invests in developing make it to the target audience across every channel.Integrating sales development and demand generation as part of the same organization with common goals and measurements is unique. When asked, Kyle believes this is more due to transition and logic, and one of those legacy thoughts is that "quantity" of leads versus "quality" of outcomes such as pipeline dollar growth and new ARR.Though Kyle mentioned that it is still important to measure more traditional metrics like website visitor conversion rates, leads, paid media performance, etc. - the ultimate measurements for Sales Development and Demand Generation are PIPELINE and REVENUE.Where does the combined function of Sales Development and Demand Generation report? Kyle reports directly to the Chief Revenue Officer, while also having a dotted line reporting relationship to the Chief Marketing Officer. Kyle highlighted that his function is the core functional "connective tissue" to align marketing and sales.The Chief Revenue Officer (CRO) does not have responsibility for all marketing. However, in Clari, since demand generation is part of their responsibility, it frees marketing up to increase their focus on brand, content marketing, product marketing, and corporate communications. Account Management and Customer Success reports into the CRO, which provides a well-integrated approach to the entire customer lifecycle, including acquisition, retention, and expansion.Kyle is also blazing the trail by having dedicated Sales Development Reps focused on existing customer expansion in partnership with Account Managers. This is a new approach within Clari, and the process continues to evolve. Today, the Account Management team focuses more on existing customer renewals. The existing customer Sales Development Rep is responsible for sourcing, educating, and qualifying up-sell and cross-sell opportunities. The existing customer sales development resource is called an Account Development Manager. The Account Development Manager is compensated against qualified opportunity pipeline and has a management by objectives focused on expanding business within key target, strategic accounts.Kyle continued to refer to quality as a major topic, so we asked "how do you define quality" for sales development at Clari? Clari does NOT incent on booking meetings, it is more focused on outcomes, specifically qualified pipeline. SDRs create a Stage "0" opportunity, and then the Account Executive determines if the opportunity is qualified, and that is the first incentive component for SDRs.  Clari does not use "BANT" but uses more nuanced criteria, including seniority, readiness, and next steps defined versus budget and timing. This approach is primarily due to the "Revenue Operations" Technology space still evolving and often not a budgeted line technology.If you are evaluating new and better ways to accelerate pipeline growth, Kyle 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.

Geoffrey Moore, acclaimed author of 'Crossing the Chasm,' shares insights from his groundbreaking work on technology adoption. He discusses the importance of understanding buyer profiles, the psychology behind decision-making, and the timeless strategies for B2B success. Moore highlights the 'bowling alley strategy' for market penetration and the significance of securing Lighthouse accounts for trust. He also explores the dual impact of digital realms on society and ethics, emphasizing the need for self-reflection and ethical leadership in the tech landscape.