Metrics that Measure Up

Helen Lin is the founder and CEO of Discern. As a business end-user of business performance data, she discovered that the data required for analysis was locked in the system of records, such as the CRM, ERP, or HCM. This required a dedicated team of analysts to identify the source of the required data, a process to extract the data from the system of records before they could even begin the process of analyzing the data.  During this episode, we cover three main areas with Helen:The challenges with managing the customer acquisition funnel in 2023How full-funnel analytics impacts GTM efficiencyWhat is the future of full-funnel analytics2023 was the year of efficiency, especially in the Go-to-Market functions. One of the key GTM efficiency metrics is the CAC Payback Period which measures how many months are required to payback the cost of acquiring a customer, after factoring in the Gross Margin. Marketing departments focused on the cost per lead, coupled with the associated conversion rates while Sales departments were laser-focused on productivity per sales rep, including an enhanced focus on average sales price per deal.Helen dove into the challenges of measuring "cost per x" due to the difficulty in assessing the cost data which is often locked in the human capital management and/or core financial platforms.A key point that Helen highlighted is that "growth" has re-emerged as the number one factor in enterprise value to revenue multiples, which suggests a heightened focus on Sales and Marketing investments and the associated returns.Full funnel analytics goes beyond new customer opportunity inspection or pipeline inspection, and provides a full picture of how the end-to-end funnel is performing from initial lead creation to Closed-Won ARR through customer retention and expansion. The role of management and Revenue Operations is to identify the areas, often the bottlenecks that negatively impact funnel conversion performance.Helen provided a customer example that assessed the profitability of each customer segment. The analysis went beyond measuring just customer acquisition performance and extended the analysis to include both churn rates and expansion ARR by segment. That analysis resulted in identifying a customer that was not profitable and thus ended all future investments in acquiring customers in that segment.  Marketing and Sales currently have a difficult time assessing the data that highlights how each unique stage of the customer acquisition process performs as measured by conversion rates to the next stage and simultaneously how much time a lead or opportunity remains in the same stage. One primary example is that many companies experience 80% of deals forecasted to close in the current quarter being pushed to a subsequent quarter. Another key metric is "Win-Rate" which is not a point-in-time measurement, rather it is a range that evolves over the period that opportunities remain in the pipeline.IF you are a Go-to-Market leader or the CEO or CFO of a B2B SaaS company, this discussion with Helen on the need and approaches to better understand the entire customer's journey from acquisition to retention to expansion + customer segment profitability, this conversation with Helen Lin, Founder and CEO of Discern.io 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.

Randy Wootton, the CEO of Maxio is a multiple-time B2B SaaS CEO. However, his current role is unique in that within six months of taking on the role, the existing company which was the combination of two well-known companies (SaaS Optics and Chargify) decided to rebrand as Maxio and doing this during the great SaaS market correction started in the 2H-22.During this episode shared his experienced-based insights as a multiple-time B2B SaaS CEO including:Re-branding two combined B2B SaaS companies into a new single brandInsights into Achieving Efficient Growth During Uncertain TimesBalancing Growth and ProfitabilityMetrics Operators and Investors Can Agree UponMaxio is a combination of SaaS Optics and Chargify. Each company was very similar as measured by size, and number of customers and was viewed as a "Merger of Equals". As such, when combining these two companies neither was viewed as the acquiring company, so Randy needed to chart the course to combine two very equal companies, to gain both operating efficiency and market scale.Randy's first introduction was being a Maxio customer and appreciated how it made him more prepared to manage the business in near real-time, close the books, and then prepare the financial reports for the board without the stress of last-minute, manual processes. In Randy's words, Maxio provided him with a business radar, calling upon his experience as a naval aviator...and was the perfect foundation to become the Maxio CEO.On the topic of launching a new brand, Randy shared the jury is still out on whether this was the best strategy versus doubling down on one of the existing brands. One of the biggest challenges is building back and upon the SaaS Optics and Chargify brand awareness.The next topic Randy and I covered was the simultaneous challenge of balancing profitability and growth amid the great B2B SaaS recession over the last 18 months. Randy started by discussing their core target market is other B2B SaaS companies, primarily in the SMB market segment, which has been the segment most impacted by the current trends in growth and capital availability for SMB companies. Initially, Randy had to pivot to get the company profitable, and then be focused on determining which ICP(s) to target and what is the optimal Customer Acquisition Cost investment, while balancing growth and profitability.Randy highlighted that while growth is still a priority over profitability, it is critical to reach profitability to control your destiny versus being beholden to external capital sources. This is especially important during a lower growth external environment, which allows the strongest and most well-prepared companies to begin accelerating growth investments in alignment with external market conditions.Lastly, Randy highlighted the two SaaS Metrics that Maxio and Battery Ventures use to collaborate on analyzing efficient growth metrics and their trends. One is the Blended CAC Ratio which measures the expenses in Sales, Marketing, and Customer Success divided by New ARR from both new name customers and existing customers expansion. Trying to get to a Blended CAC Ratio of 1 - which means $1 of Sales and Marketing Expenses to acquirSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Peter Berg, Managing Partner at M12 - the Microsoft corporate venture capital arm joins our host, Ray Rike to discuss the trends and measurements of success in venture capital inside Microsoft.Topics that Peter provide deep insights into included:The role of Corporate Venture Capital - insight from Visa and MicrosoftThe evolution of venture investing in 2024 and beyondMega-trends that will shape the future of technology investing Top 3 Cloud/SaaS Industry forecasts for 2024If you are interested in how large technology companies use a captive internal VC organization to drive strategy, ecosystem reach and financial returns simultaneously this conversation with Peter Berg, Managing Partner at M12 - the VC arm of Microsoft is highly educational and entertaining!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Kevan Savage, Principal of the Marketing practice at the Alexander Group shares the results of the research and associated report from the Alexander Group - Unveiling Pipeline to Profits with our host, Ray Rike. The report highlights the trends in demand generation and the associated return on investment of those changes. Key topics discussed during this episode include:Marketing expense trends as a % of RevenueAllocation of Marketing investments for Demand GenerationPipeline contribution by sourceFull conversion benchmarks from Marketing Qualified Leads to RevenueAs companies model and plan for next year - this episode is chalked full of the latest trends, budgets and Return on Investment by company size and is a great listen for CMOs, CEOs and CFOs as they focus on efficiency growth strategies, and tactics.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Phil Pergola, CEO at CloudZero shares his unique insights into how to better understand, manage, and reduce the Cost of Goods Sold associated with using Cloud Computing infrastructure for B2B SaaS applications. During this episode Phil and our host, Ray Rike discuss the following topics:Cloud Cost Trends as a percentage of the Cost of Goods Sold (COGS)Reducing Cloud costs techniques beyond vendor negotiationHow to identify Cloud cost-saving opportunitiesGross Margins in the B2B SaaS industry have remained fairly stable over the past 10 years - so why focus on Cloud costs? The second largest expense for most B2B SaaS companies are human resource costs (#1) and then cloud delivery costs which are continuing to increase as the number of cloud infrastructure vendors is expanding to new tools like observability, data analytics, and security tools.There are three things that primarily drive cloud costs: 1) SW Architecture; 2) Pricing model(s) offered by vendors and used by customers; and 3) Actual Cloud usage which is directly driven by engineering decisions and customer utilization patterns. Taking a closer look at #1 and #3 is a missed opportunity in the majority of digital product providers.Why is it that COGS is often a secondary expense item that CEOs and CFOs focus on? First, it is typically seen as the domain of the CTO and engineering teams, and it is very hard to allocate discrete costs in the product infrastructure which contribute to non-optimized cloud consumption patterns.If you are looking for new and innovative ways to increase efficiency in those areas which can result in increased Gross Profit - then this is a great listen to understand the most recent trends and techniques for controlling your ever-growing Cloud costs!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

On this episode, we are joined by Udi Ledergor, the Chief Marketing Officer at GONG responsible for first creating the Conversational Intelligence category and then again in creating the Revenue Intelligence category resulting in one of the fastest growing B2B SaaS companies in history.In this episode, Udi highlights the evolving strategy and measurements for the Marketing organization at Gong along the growth journey to greater than $100M ARR and a $6B+ in company value!Creating a category builds the overall Target Addressable Market (TAM) - creating a brand increases the percentage of the TAM the category leader captures. Gong's journey and Udi's role in building their success is a valuable lesson chalked full of great ideas, insights and experiences!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave Kellogg is the author of Kellblog, Executive in Residence at Balderton Capital, multiple time SaaS CEO, investor and an OG for all things SaaS Metrics. During this episode, which is from his presentation at SaaS Metrics Palooza 23', Dave shares his insights and best practices on presenting SaaS metrics like a pro - especially to board members and investors. Ten mistakes that many make in presenting SaaS Metrics include:Amateur presentationCherry-picking Mis-benchmarkingOmitting contextPiecemealingDumping Smooth operatorForgetting questionMissing investor point of viewRetinal burnThis episode is chalked full of details, nuances and insight. If you would like to see the slides that Dave uses to guide this session at SaaS Metrics Palooza 23' you can download them at:benchmarkit.ai/saas-metrics-palooza-23-1/how-to-present-and-analyze-saas-metrics-like-a-proSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Science of Scaling, was a session delivered by Mark Roberge at SaaS Metrics Palooza 23'. In this episode, Mark discusses a math centric approach to determine if Product-Market Fit has been achieved, when to scale GTM investment and how much to invest in growth.Key concepts introduced include:How to use a mathematical formula to determine if Product-Market Fit is achieved (PET Metric)The leading indicators (unit economics) that inform increasing investment in customer acquisitionNorth Star metrics used by leading B2B SaaS companies to measure Product-Market FitThe power and competitive advantage of capturing daily leading indicators to scale economicsIf you prefer to watch the entire session and see the associated slides - the video can be seen at:https://bit.ly/SaaSMetricsPaloozaMarkRobergeIf you are asking questions such as: 1) Have we reached product-market fit; 2) Should we invest more to scale customer acquisition; 3) How much and how quickly should we invest more capital to accelerate growth then this episode is a must listen!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chad Gold, the CFO at B2B SaaS Sales Engagement Platform leader Salesloft, shares how the role of a SaaS CFO has evolved over the last few years.Chad and the Metrics that Measure Up podcast host, Ray Rike discuss the following topics during this episode:How the B2B SaaS CFO role has evolvedHow performance metrics are used to manage and report on the businessHow performance metrics are used for budgeting and planningHow the B2B SaaS CFO Role will evolve over the next few yearsChad started his career as a corporate finance analyst at Ernst and Young (EY) and then migrated to the Home Depot in a variety of financial roles that built his foundation into the strategic side of finance. Chad's first B2B technology job was at Ariba, a division of SAP where he was able to apply his FP&A experience in a technology company. Chad has been the Salesloft CFO for 5 years and has seen the company grow by 10x including a majority investment by Vista Equity.Chad shared his "lines not dots" which means the ability to meet people and then foster relationships with them over time is a key to being exposed to different opportunities which is how Chad transitioned into the B2B Technology industry.Chad highlighted that his role as a CFO has not evolved that much over the last couple of years, beyond being asked to help identify those aspects of the business that are best positioned to drive efficient growth especially now that capital is more difficult to secure, and thus difficult capital allocation decisions are more important in 2023 than they were in 2020 - 2022.What are "Chad's" go-to metrics? He started at a high level with momentum and velocity metrics like the ARR funnel, new booking, churn, expansions, and the leading indicators of pipeline and customer health. Chad highlighted the importance of the number of integrations to other systems which is a great indicator of retention!He also highlighted his engagement with the key GTM functions, such as the Customer Success function to understand product engagement and utilization as an early indicator of churn and/or expansion - thus providing early visibility into making better forecasts. Chad used the term "you can read the news or make the news" which is how he approaches partnering with the other members of the executive team to ensure how the leading indicators metrics are performing, and even how to enhance their performance which will lead to better financial metrics outcomes.If you work with a CFO in your business, would like to become a CFO or even just want to better understand CFO best practices to drive better financial results through cross-functional collaboration and of course...metrics this conversation with Chad Gold 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.

Michael DiFilippo, Chief Financial Officer at Invoca shares his journey to becoming a B2B SaaS CFO and how the role has evolved over the last ten years, During this episode of the Metrics that Measure Up podcast, Michael and I discussed the following items:How the B2B SaaS CFO role has evolved over the last few yearsHow Michael uses Performance Metrics to manage the businessHow the B2B SaaS CFO role will evolve over the next few yearsMichael started his journey to becoming a SaaS CFO in accounting, treasury, internal audit, and ultimately FP&A roles in the industry goods and then consumer food industry. In 2008, Michael secured his first CFO role in a B2B SaaS company with MuleSoft - ultimately acquired by Salesforce. This cross-functional foundation was so valuable to Michael that he continues to try and provide members in his organization the same opportunities.Michael credits DuPont with his broad orientation to finance through their rotational program, and ultimately he landed in a division producing LED screens. Then, when his former boss went to Symbol Technologies, he was recruited to join him and that was the start of his finance experience in a technology company.We pivoted to how the B2B SaaS role has evolved since Michael first became a SaaS CFO in 2008. First, he has seen the role evolve to a more strategic, growth partner in an advisory role to the executive team, and sees the same "strategic" focus of CFOs from executive recruiters. Michael says part of the evolution to a strategic CFO role is partially based upon his base of experience, and being invited into those discussions. In parallel, Michael has seen the scope of the CFO role expand into including other functions like Legal, Human Resources, IT, and even operations in some companies. Bottom line - the modern SaaS CFO is no longer primarily focused on the accounting side of the equation.Another key focus is how Finance ensures they have access to all of the operational data required to have better insights into how the business, especially the leading indicators is performing. At Invoca, The FP&A team is the primary liaison to the Sales operations team to ensure the data from the CRM system is flowing efficiently into the financial reporting process.Michael next focused on the primary measurements and metrics he uses to help manage the operational side of the business, its primary forward-looking metrics like pipeline performance trends, Sales Development meetings, and top opportunities trending. As Michael said, ARR growth is the #1 metric using a metaphor of book more and churn less!At the board level, the operational metrics include top-level metrics including Rule of 40, Gross Retention, Net Revenue Retention, Total Sales and Marketing Efficiency, CAC Payback Period, Actual versus Plan, New ARR booked, and New Customers which will then expand into the leading indicator trends that will impact those outcome metrics in the future quarter(s).Michael shared his vision for the future evolution of the B2B SaaS CFO which he agreed with our host will become one of the more common paths for Chief Executive Officers in the future!If you are in Finance and/or have a goal to become a B2B SaaS CFO - this conversation with Michael DiFilippo is a must listen!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.