Metrics that Measure Up

Jeremey Donovan is the epitome of the phrase "Always Be Learning".Jeremey started his career as a semiconductor engineer, transitioned to be an analyst covering the industry, then transitioned to product development, then to product management, product marketing, and finally to sales.  To say he is a continuous learner is an understatement!Most recently, Jeremey started his pursuit as a Masters of Data Science while serving in the role of Senior Vice President of Revenue Strategy at SaleLoft.What is Revenue Strategy?  First, it's about the people, programs, processes and technology in pursuit of meeting company goals.  As the SVP Sales has evolved to the Chief Revenue Officer, and integrated the responsibility for pre-sales, sales and post-sales, the need for an operations function and strategy that reflects the entire customer lifecycle has evolved.One strategy that impacted revenue growth was moving the inbound Sales Development organization into marketing.  By moving the team to Marketing, it created more incentive for marketing to generate leads and create a better feedback loop into marketing on what the market was saying.  Jeremey thinks that having a CMO and a CRO that are peers is a better model for larger organizations.Jeremey's perspective on Revenue Operations is different He sees value in having marketing operations, sales operations, and customer success operations report into the COO or CFO versus sales or marketing.What is the segmentation of Revenue Operations versus Revenue Strategy?  Jeremey's role is unique, and more of a general corporate strategy resource (think Chief of Staff). In fact, the Chief of Staff is a trending new role in the B2B SaaS industry, and one of the four roles that Jeremey serves for the SalesLoft CEO.Jeremey sees the operations team primarily working "IN" the business and Revenue Strategy works "ON" the business.   Revenue Strategy is responsible for coming up with strategic initiatives, Go-To-Market strategies, etc., and then initially collaborating with the Revenue Operations team to deploy the strategy and then over time Revenue Operations takes primary responsibility to measure, manage and refine the program as feedback requires.When asked about the top lagging and leading indicators (metrics) that he uses to measure the return on a particular revenue strategy,  his answer included an "Issue Tree" which is a process to deconstruct higher-level metrics into their component parts.  The example was "Net Dollar Retention" metrics break down into Gross Dollar Retention + Expansion, and then the next level breaks down into metrics such as Customer Success team productivity.We next discussed leading indicators and their correlation to the top-level, outcome metrics like Net Dollar Retention.   Jeremey highlights adoption, configuration, and customer sentiment (CSAT and NPS) as part of a composite health score that directly impacts Net Dollar Retention.  Analyzing the correlation, using logistic regression is used to predict retention, using the composite inputs of the sentiment score, per the above. They also use similar models to predict the probability of winning an opportunity. Using Bayesian logic, they analyze predict the likelihood of an opportunity closing using inputs such as activity, time, events, and historical trends that predicted opportunity closure.  In fact, this customer engagement score (opportunity score) is even available as part of the SalesLoft platform.Every metric may matter, but  they may not always matter at the same time or have the same predictive value.  Figure out which are "out of kilter" and which enable "decisions and prescriptive actions".Jeremey is a great listen for any B2B SaaS revenue and/or revenue operations professional!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chris Walker, Founder and CEO of Refine Labs, Host of Demand Gen Live, and a Top LinkedIn Influencer is a B2B Marketing contrarian - that is a primary reason I have been a fan of Chris's for a long time.Chris was a B2B marketing practitioner for 8 years, and his experience told him B2B marketing organizations were executing marketing programs the wrong way!  The market had changed, the buyers had changed and the buying process had changed...yet marketing programs were the same, using the same vanity metrics and fake measurements systems.Chris decided he had been provided a gift, and it allowed him to build a marketing agency that was built for demand generation in 2020 and aligned with his vision for the modern B2B marketer.  His foundational belief is that B2B buyers are looking to buy things in places that cannot be tracked by current marketing attribution. Those locations included LinkedIn, YouTube,  Instagram, Twitter, communities,  groups on social networks, podcasts, direct word of mouth, and referrals by peers.  These are the locations that people in 2021 and beyond are sharing ideas, looking for experiences, and starting the buying journey.Traditional media such as SEO, SEM,  display ads, and content syndication are great to show "vanity metrics" and "attribution" but are not delivering the ultimate outcomes - pipeline and revenue.  In fact, often the tracking stops at "attribution by channel" but do not track the ultimate ROI down to revenue, CAC Ratio and CAC Payback Period.Brand Awareness - this is not the major issue for many companies, but "RELEVANCE" to the target buyer is an issue for many - such as Salesforce is toomarketing.  Logo awareness does not directly impact the way a target buyer feels about a company's value to them as a potential buyer.Chris's goal is to be in the places where buyers "establish" consideration for a product category or content, and not wait until first-party intent at the bottom of the funnel when 70% of the buying process has already been completed. Content that is value-based, customer-focused, and made available as non-gated assets are key to help to shape the buying discussion at the start of the buyer journey versus reacting to the buyer demands.Chris's first key metric is to measure the close rate of inbound leads, that may not be attributed to a specific marketing program, versus the close rate of outbound generated leads.  Chris's perspective is that less than 10% of companies measure the close rate and sales cycle time of inbound leads versus outbound generated leads.Chris optimizes for "peak intent conversions" which reflects the serious intent of buyers who put up their hand to speak with a salesperson (1st party intent data) versus buying 3rd party intent signals from external websites, content syndication vendors, and review sites.Next,  I asked Chris what specific metrics that a modern B2B marketer should measure and manage.   His response: "Blended Marketing CAC and/or Blended Advertising CAC".  This metric measures the total marketing expenses divided by the total amount of revenue closed from inbound marketing leads or inbound leads from paid advertising.  Chris sees the cost per dollar of revenue closed from "outbound leads" vs the cost per dollar of revenue closed from "inbound leads"  being very different.  Chris sees an average of 50% lower CAC for inbound leads that close as compared to outbound generated leads that close (for the mid-market). When you factor in the higher close rate for inbound leads, the CAC Ratio can be 50% - 67% lower than traditional outbound lead generation programs.Revenue, Pipeline, and Customer Acquisition Cost are the TOP THREE metrics that every modern B2B marketer should use as their NORTH STAR!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Bijan Moallemi, Mosaic CEO and former financial leader at Qualcomm and Palantir, discusses challenges faced by finance teams in hypergrowth B2B companies and the importance of building a strong foundation and systems. He emphasizes the need for CFOs to track B2B SaaS metrics, interpret data through storytelling, and make timely decisions using real-time data. Advice for recent college graduates includes gaining experience in startups and larger companies, as well as developing technical skills in SQL and Python for the future of finance.

Being the CEO of a B2B SaaS company that creates a new market category, grows the company to >$100M ARR, and then purchased for over $1B by a top tier Private Equity firm may be the ultimate goal of many entrepreneurs - but for Nick Mehta and Gainsight, it is just the beginning.Nick Mehta, joined Gainsight as CEO in 2013.  Back then, Gainsight had just changed its name, launched its first user conference, and initiated the strategy to build a new market category for B2B SaaS - Customer Success Platform and a community for the recently created profession of Customer Success Manager (CSM).The decision to create a new category + a community was necessary because the evolving role of CSM's were not only the Gainsight users but also the target buyers.  Building a category is associated but different from building a community.  Creating a community of future platform customers was a core requirement to increase the target addressable market of potential buyers.  Pulse was the Customer Success community, and it had to go beyond "customers".  It became a forum and community for customer success professionals to discuss topics of interest including compensations, roles/ responsibilities, and best practices for Customer Success professionals.Nick highlighted that building a new category is probably not the best approach if a category currently exists (think Snowflake and Zoom Video).  If the market category does not currently exist, think carefully about the steps, and resources required to build a new category and how a community can amplify the category.When I asked Nick about how Product-Led Growth (PLG) would impact Customer Success , Nick started with his belief that PLG will fundamentally change the B2B Cloud Go-To-Market motion.  The control and power will accelerate its shift to the customer, and as a result Sales and Customer Success alignment, even integration will be even critical.The Cloud infrastructure companies are the most advanced in the PLG + Customer Success model.  Their Customer Success (CS) team works very closely with the customer to ensure they are receiving maximum value and expanding their use of the product.  Nick highlighted two approaches to sales and customer success alignment: 1) relay race model where sales hands off the customer to CS to ensure they are successful; 2) Sales and Customer Success work collaboratively across the entire customer journey to ensure engagement, adoption, value, customer satisfaction, expansion and share the related goals and measurements.When asked the top metrics to measure Customer Success, Nick highlighted both leading and lagging indicators.  For Customer Success, Nick highlighted the top lagging indicators as renewals (GrossDollar Retention Rate) and expansion (Net Dollar Retention Rate).  In fact, recent research conducted by both Gainsight and by RevOps Squared independently, showed that NDR was the number one factor impacting Enterprise Value:Revenue multiples. The Gainsight framework for leading indicators is called DEAR: 1) Deployment; 2) Engagement; 3) Adoption; 4) ROI.  Next is the experience side including Net Promoter Score, Customer Satisfaction, and even support case trends.Lastly, we discussed the role of product analytics in the PLG model, in concert with how Customer Success will require deeper and broader insights into the customer's product utilization. Insights including which paths most customers follow, which paths end in user frustration and abandonment, and in the WOW category, how to build Customer Success directly into the product!Nick Mehta is a great listen for any founder, CEO, and/or operating executive who shares the belief is that customer value = customer success and the added vision of building a "Human First" company!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

B2B SaaS founders continue to find new financing options to both grow their business and/or be rewarded for their sweat equity investment.Akeel Jabber's journey from petroleum engineer, to gym founder, to real estate investor and now "micro private equity" investor has one common thread - entrepreneurship focused on how to generate cash flowAkeel's first area of focus to generate returns +  cash flow was investing in the stock market.  He quickly identified that the large institutional investors on Wall Street had an unfair advantage as measured by technology, access, and sophistication.  As he searched for alternative avenues to build cash flow, he identified technology assets with recurring revenue streams as an attractive investment area - especially for the less than $5M ARR B2B SaaS companies that were not growing  50%+ per year.Akeel's first experience at $99 Social highlighted that with the right focus on go-to-market programs, processes, and operational excellence, smaller B2B SaaS companies could accelerate growth, and thus cash flow + enterprise value for founders and investors alike.  This experience led to the founding of Horizen Capital.  Horizen Capital is focused on investing in <$5M ARR B2B SaaS companies with 10% - 30% growth rates, and then applying their operational and go-to-market expertise to unlock 50%+ growth rates, resulting in increased returns for founder and investor alike.Akeel defines the early stage B2B SaaS market that they invest in three segments:Pre Seed Stage (pre-revenue)     - Raised friends and family investments    - prove they are the best team to tackle this problem/opportunitySeed Stage ($120K - $1M ARR)     -  Product built     - Market and user feedback received     - Money charged to and received from customersSeries A ($1M - $10M)Built good productEstablished Product Market Fit (PMF)Built out initial marketing channelsThe metrics that Akeel and Horizen Capital focuses primarily on when making micro private equity investments include:Historic Growth Rates (10% - 30%)Greater than 30% - 50% founders should evaluate VC investorsChurn< 5% month over month SMB market< 2% per monthCommercial/Mid-MarketCLTV$1,500 - $2,000 at leastSize of company is used to conduct cohort-based CLTV analysis5 Users (higher churn)> 5 Users have different CLTV (lower churn)Blended hides realityWhen asked how does a founder know if it's time to sell or just fund their company, Akeel suggested to ask these two questions:      #1: Am I still enjoying running my company?     #2: What am I trying to achieve by taking micro PE money?                       - Exit and go do something new                      - Accelerate my company growth rate Akeel shared the top sites and companies that a B2B SaaS founder looking for a potential exit/acquisition should know about:1. M&A Advisory Firms2. Empire Flippers3, MicroAcquire4. FlippaIf you are an entrepreneur, especially one in the B2B SaaS business looking for strategic investment and growth support, this Metrics that Measure Up episode with Akeel Jabber is a great listen...as is the SaaS District Podcast that Akeel hosts!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Renee Cullinan, founder of "Stop Meeting Like This"  is pivoting her highly successful career as a high tech executive and then founder of a pioneering consulting company that focused on how to increased company productivity and employee satisfaction by eliminating the wasted time associated with internal meetings and email overload.In this episode of Metrics that Measure Up, we focus on both the metrics associated with increased employee productivity and then on the increasing importance of understanding and enhancing stakeholder satisfaction.White-collar employees, especially senior executives spend most of their time in meetings and composing and responding to emails.  Using a typical executive, they spend approximately 25 hours per week in meetings, which equates to 1,200 hours per year, and on average, 32% of that time is wasted.  Think how much more productive you can be with having an extra 400 hours (10 weeks) to invest in higher value, strategic activities?Unfortunately, not enough companies tackle this productivity opportunity, often because of the inherent challenge of the existing culture of a company.  Fixing this requires consistent, ongoing executive commitment which means having a long-term employee productivity orientation. Biopharma companies lead the way in being willing to take on this opportunity, due to their historical long-term orientation.In the "very interesting" category, Renee actually found the work from home environment during the pandemic, actually helped to increase the productivity of meetings and the Renee shares 5 questions to determine if your organization is positioned to capture this hidden productivity drain: Are you a manager or maker?How many hours are you in meetings per week?Which of the following statements is more true?       - I control my calendar or my calendar controls meGiven my role, the # of meetings I am in is?       - too many      - just right      - too fewWhat percentage of total meeting time is wasted?      - late starts     - late arrivals requiring repeating conversations     - technology snafusNext, we pivoted to Stakeholder capitalism and Environmental, Social, and Corporate Governance (ESG).  My first question was if only 50% of companies are willing to invest in tackling internal employee productivity,  how willing are they to take on ESG.    Renee highlighted that internal productivity and employee satisfaction are too often a "HR" initiative and thus are often dead on arrival.In contrast, ESG is driven primarily by external constituents, by regulatory bodies like the SEC, and potential customers, especially in the Fortune 500 are now requiring ESG responses within vendor RFPs and many board of directors are linking executive compensation to ESG metrics and measurements.Socially responsible investing is also increasing measured by shareholder investment decisions, in fact, the percentage of US-based assets under management that use ESG criteria to make investments increased by 42% over the last two years.I asked Renee if small, high-growth B2B SaaS companies can justify investing in ESG initiatives.  The response, if you are selling to Enterprise-class companies, ESG leadership will be a competitive advantage in acquiring new customers AND socially conscious employees.Renee's example of the social impact of "free meals" at high tech companies and its impact on local businesses and the local community are not understood, or at least not prioritized.If ESG and stakeholder capitalism + increasing employee productivity are topics you are interested in promoting within your company,  Renee 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.

Revenue Operations is positioned to be the revenue architect across the customer journey.  That is a bold statement and the perspective of one of the leading revenue operations thought leaders, Jeff Ignacio.Revenue Operations hit an "inflection point" in 2021.  Jeff believes the rapid growth of B2B SaaS companies has highlighted the incongruency that customers are experiencing due to the "drops" in internal hand-offs between marketing, sales, and customer success.Jeff believes Revenue Operations should act like Product Management.  RevOps customers are the marketing, sales, and customer success resources who need the right data, at the right time, in the right context delivered by the right process.  This includes understanding the "customer experience" with their company at every stage of the customer journey.Product-Led Growth has led to a new requirement for Revenue Operations, and that is the ability to leverage and integrate the data from product analytics platforms into the revenue tech stack.  These new "data operations" skill-set is not typically available in existing RevOps organizations, and may even require a new operations group.Is a Chief Revenue Officer required to make revenue operations fully productive? Jeff said this is helpful in early-stage companies when the customer journey is less mature.   In larger organizations with more well-defined and mature organizational structures, the need for a CRO to make revenue operations effective is less important.Jeff defines revenue operations to include 4 pillars:Process Enablement Advisory SupportWhen asked about Revenue Operations being more "strategic" versus "tactical", Jeff's first recommendation was to allocate time slots upfront to strategic activity.  Secondly, Jeff said that "ruthless prioritization" in understanding what is critical path to achieving the measurable goals that have been established. This includes becoming comfortable with setting expectations with your stakeholders, including being able to push back when requests are not aligned with the mutually agreed-upon goals.Jeff also recommended that asking "what are you trying to accomplish" upfront when asked to execute an activity will be a good step in moving from reactive resource to strategic asset to the revenue leadership team.  Another idea was to start thinking more proactively about what the data you are creating suggests, and start to provide more strategic ideas and recommendations to address negative trends highlighted by the data and reports.When asked about the optimal "profile" for a revenue operation professional, Jeff highlighted a few key attributes, especially business acumen and the ability to clarify, thus understand the real goals of the executive stakeholder.  Jeff also suggested using a case study approach to interviews to understand how the candidate has applied their skills in similar situations.Will revenue operations be a must-have experience for the CRO of the future?  Jeff's answer was nuanced, highlighting skill sets including data analysis, process design competencies, and system design will be valuable, but having hand's on RevOps experience will be a plus but not a requirement.I then asked Jeff to pull out his crystal ball and predict how Revenue Operations will impact business performance - thus be measured.  His responses: 1) Customer Acquisition Costs; 2) Expansion time and profitability to enter new markets.Lastly, Jeff discussed the need for RevOps to move from working "in the business" to "on the business".  This will enable RevOps to become a strategic advisor, with a seat at the executive team table.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Product-Led Growth (PLG) and B2B Sales - how do they co-exist in the evolving world of Go-To-Market strategy in B2B SaaS?On this episode of the Metrics that Measure Up podcast we are joined by Tim Geisenheimer, Founder and CEO of Correlated.  Tim's first experience was leading a sales team in a PLG company where he experienced the change in how customers first experience a product.  PLG requires the sales team to truly understand "HOW" customers are using the product, and adjust their sales outreach accordingly.First, we discussed the real and perceived risks that sales face in a PLG company.  Tim said that sales is critical in PLG companies, though the skills and approaches change.Sales professionals must become product consultants who can help users gain the most value from the product.  This requires the sales professional to have much deeper visibility into how the user is using the product.Second, we pivoted to discuss how PLG may impact pipeline development and the Sales Development function.  One of the interesting changes is that the number of inbound leads increases dramatically in PLG companies, and SDRs will be required to learn the skills of inbound lead qualification instead of outbound led generation.This evolved into the creation of a Product Qualified Lead (PQL).  A PQL is the scoring of a potential paying customer based upon how they are using the free version of the product. Some of the common variables used to score a PQL include log-in frequency and are they using high-value features.  These two primary signals can be used to score a lead and help prioritize which users and accounts to reach out to first.Is "Value-Based Selling" still a key sales skill required to be successful?  Tim went back to the need for B2B sales professionals to have better product knowledge, as it relates to the business value delivered.I pushed Tim on 'if" Customer Success is better positioned to help free users become paying customers?  His response centered on the need for sales to become product consultants and that sales skills will be critical to optimizing free users converting into paying customers.Tim highlighted that a foundational element required for sales to be productive in PLG companies is having easy-to-access and understandable product analytics information available by the user, by account in the Customer Relationship Management platform.  I asked Tim if "existing" CRM vendors can provide the required functionality for this?  In response to this question, Tim highlighted that existing CRM tools are limited in providing this functionality, in part due to the relational database model that traditional CRM tools are based. The most common "metrics" that he sees Chief Revenue Officers being measured upon in PLG companies is "existing customer expansion" and "Net Dollar Retention Rate" which highlights one of the most attractive aspects of the "land and expand" model for PLG companies.  Average Time to Expansion is a new leading indicator that PLG companies are tracking, with best-in-class companies seeing < 60 days from the time a client first signs up to expanding their "paid" usage.The classic "Close Rate" metric will be different in PLG companies, and not as important as other expansion-centric metrics.  The other topic we discussed was if "sales comp plans" are changing in PLG companies.  One change is assigning sales reps longer to accounts to shepherd the "expansion" journey.  In fact, Snowflake has no CS  resources as sales own total responsibility for existing client expansion.If you won revenue responsibility in a PLG company, this is a great listen to understand the evolving world of sales in B2B SaaS and Cloud companies.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Leaders of Growth - a phrase that could refer to many B2B SaaS companies and executives.Today, we speak with Arthur Nobel, principal at Knight Capital and author of Leaders of Growth.Leaders of Growth is the result of 47 interviews with B2B SaaS operating executives and investors.  Brand name B2B SaaS executives including Mark Roberge, Matt Chappell, Katie Christian, Nathan Latka, Wes Bush, Patrick Campbell plus 42 more B2B SaaS executives with hands-on experience in scaling companies beyond Product-Market Fit.Arthur first shared three different ways to define the journey and stages that B2B SaaS and Cloud companies go through. 3 views on company journey stage:  - Sequential (Series A, Series B, Series C, etc)  - Revenue approach ($1M, $5M, $10M, $20M, etc.)  - Company Maturity ModelWe then dove into whether investors actually modify their investment thesis and enterprise valuation models based upon the above 3 lenses?  Revenue growth, especially the velocity of growth remains a primary variable which VCs use to establish company value.The thing that stood out the most from the 47 interviews was the AUTHENTICITY of everyone interviewed.  Also, their openness and willingness to share their experiences and lessons learned...especially those learnings through failure as well as success.The second theme he identified was the top-down view that investors shared and the bottoms-up perspective that the majority of operators used.  When asked to explain what "top-down" and "bottoms-up" meant, Arthur shared that operators were much more focused on the more pragmatic "what" drove the business including topics like hiring, culture, tactical approaches whereas investors were much more focused on conceptual thinking, such as frameworks and methodologies.When asked common challenges that the growth leaders faced, Arthur shared six common categories:   - Departmental objectives at each stage of growth  -  Data challenge - including what metrics to measure and prioritize at each stage  - HR Challenge - such as hiring the right people at the right stage  - Documentation and enablement - critical as employee count increases  - Process challenge - well defined. documented and systemized after 20 - 30 employees  - Tooling - having the appropriate platforms and systems architecture at each stageI asked Arthur if he has developed a framework to help B2B SaaS companies scale within and across each stage of growth?  He highlighted this is a very complex task, as each company's journey is unique, but would try and share his initial thoughts:High-level framework:-Scaling is not a point but a continuum that dictates using a stage by stage maturity model:     - Ad-hoc     - Process introduction    - Repeatability     - Predictability    - ScalabilityIt is also very important to define the maturity model for each function and against the six common challenges that were highlighted above.We then discussed the concept of thinking, planning, and acting like you are already in the next stage of maturity versus continuing purely executing current state processes, activities and tactics. Some examples that Arthur shared on the traditional "VC" stage basis:Series A = Replicability    - Build a strong initial leadership team   - Lay a solid foundationSeries B = Predictablity   - Establish Senior team   - Become more structued and documentedSeries C = Scalability   - Be careful of silos   - Use shared metrics to align cross-functional teams Learning from those who have already been there is the key theme of this episode!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.