SaaS Talk™ with the Metrics Brothers - Strategies, Insights, & Metrics for B2B SaaS Executive Leaders

Dave "CAC" Kellogg and Ray "Growth" Rike continue their discussion on the SaaS Metrics Maturity Model which includes the below five levels:Level 1: FoundationLevel 2: TrustLevel 3: Strategic LinkageLevel 4: Metrics CultureLevel 5: TrajectoryLevel 1:  Lay the foundationDefinitions and calculationsPipeline stages, forecast categories, close dates, values, SaaS metricsSemantics - what do words like best case, forecast, commit and downside meanInstrument underlying systems (GL, CRM, Billing, HCM, etc)Consider Metrics CommitteeLevel 2:  Build trustTemplates, templates, templatesMetrics selection & presentationHistory & context - always include footnotes on how metrics are calculatedRegular Cadence:  which templates used at which meetings?Continuous improvement - fix data at the source, improve templatesLevel 3:  Link Metrics to Business StrategyIdentify your top challenges Define 4-6 strategic goals - align metrics to those goalsLink department, team and individual objectives to the company metrics (OKRs)Level 4:  Build a metrics cultureDemand numeracyManage to the regular metrics publishing cadenceMetrics conversations about the business impact NOT the metric calculation methodLevel 5:  Agree on strategic trajectoryLong-range, driver-based modelsTimeframe:  When are metrics goals targeted to be achieved, what are the milestones towards goalSequencing:  Not everything at once - what is the priority order and associated timeframe for each metric's goalIf you are a creator, user or participant in how your company uses metrics to measure performance, inform decision making and/or report performance to your boss, your board and your investors this conversation will be valuable!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the 5 root causes that created the need to develop a SaaS Metrics Maturity Model for companies as they scale.The top five root causes that lead to the 15 primary problems in how companies use metrics include:There’s no shared metrics foundationThere’s no trustMetrics are not integral to strategyThe culture is not metrics-drivenMetrics are not being used define trajectory and long-term goalsThis episode discusses the key challenges in using metrics and the approaches to address those challenges. This discussion builds up to the introduction of the Metrics Maturity Model and the 5 levels of maturity:Level 1: FoundationLevel 2: TrustLevel 3: Strategic LinkageLevel 4: Metrics CultureLevel 5: TrajectoryIf you use, develop or just are a student of SaaS Metrics - this episode is full of insights and ideas on how to accelerate your company's metrics maturity model to level 5!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) Ratio - a metric many consider the ultimate compound metric that investors love.During this episode topics covered include:How to calculate Customer Lifetime ValueHow to calculate Customer Acquisition CostBenchmarks for LTV:CAC Ratio and the translation to Rate of ReturnPrimary input variables and predictive indicators to optimize LTV:CAC RatioIf you have ever heard of the LTV:CAC Ratio or just are interested in some of the details and finer points from CAC and GROWTH - this is a entertaining and information episode!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This is a replay of one of the most popular SaaS Talk episodes published in season #1. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into all things Customer Acquisition Cost (CAC) including the CAC Ratio.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Aileen Lee, Founder and Managing Partner at Cowboy Ventures recently wrote an article entitled "Welcome Back to the Unicorn Club, 10 Years Later" (1/18/24) which was a follow up to an article she wrote in November, 2013 entitled "Welcome to the Unicorn Club: Learning from Billion-Dollar Startups".Our SaaS Talk™ with the Metrics Brothers co-hosts, Dave "CAC" Kellogg and Ray "Growth" Rike do a deep dive into how private and public company valuations are calculate, explore the difference between Market Capitalization and Enterprise Value, and uncover a few of the "inside baseball" secrets to how $1B Unicorn may be worth much less.Topics discussed include:Market CapitalizationEnterprise ValueParticipating vs Non-Participating Preferences1x, 2x and 3x Liquidation PreferenceCommon vs Preferred Stock in a Private CompanyStock Option Re-pricing - beware the last post money Unicorn valuationOnceacorn, Decacorn, Supercorn, ZIRPicorns, Papercorn, Zombiecorn, UnicorpseThe number of unicorns has grown from 39 in 2013 to 532 in 2023 per Cowboy Ventures (1,000 according to Battery Ventures). Unfortunately ~ 40% are trading for a much lower price on secondary markets than the last post-money valuations.If you love the idea of creating or being part of a VC backed company worth more than $1B, or are just interested in the material reduction in the creation of new unicorns, this episode is full of detail, insights and a little humor!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

ICONIQ Growth recently published their "Essential Go-to-Market (GTM) Board Slides", which includes the categories and metrics that they recommend be included in the GTM portion of the board deck. The template includes slides for the each category of GTM metrics they recommend including:GTM ScorecardIdeal Customer ProfileARR FunnelLogo VelocityRevenue and Logo RetentionWin/Loss AnalysisPipelineLead and Funnel ConversionSales Capacity and ProductivityTeam Update and PlanningDave "CAC" Kellogg and Ray "Growth" Rike identify and discuss their perspectives on the top slides in the template, while also highlighting a couple of additional slides that would be valuable.If you are a GTM leader, or a CEO or CFO looking on refining and optimizing the GTM portion of your board deck, this episode is full of good ideas and insights.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Common Paper recently released a benchmark report on Cloud contract terms and conditions based upon data from over 1,000 companies. This is the first benchmarking report we have found that covers SaaS/Cloud Master Service Agreements.Dave "CAC" Kellogg and Ray "Growth" Rike, better known as the Metrics Brothers break down the benchmarks contained in the report including:Agreement LengthPayment TermsLimitations of LiabilityAI and Data PrivacyInsurance RequirementsDesign Partner AgreementsIf you are responsible for designing, negotiating or enforcing Master Service Agreements in the Cloud industry, this episode provides broad and detailed insights on the latest MSA terms and conditions being used in the industry.The Common Paper Benchmark report is available by clicking here.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Nick Mehta, CEO of Gainsight joins Dave "CAC" Kellogg and Ray "Growth" Rike to discuss all things Customer Success and metrics! This is a "special episode" that combines deep Customer Success (CS) expertise with moments of light humor, pop culture references, and SaaS industry insider insights!Topics discussed and benchmarks shared during this episode include:ARR per CSMCustomers per CSMCustomer Success Reporting RelationshipsExpansion ARR and Renewal ResponsibilityCSAT or NPSFurther into the episode, additional topics covered include:Priority Outcome Metrics for CSPrimary Leading Indicators for CSCustomer Verified OutcomesThere has been a lot of talk across the industry regarding the future of Customer Success, including if Customer Success as a function is needed which was highlighted in Frank Slootman's book "Amp it Up".If you have a Customer Success team, are considering how to invest in Customer Success, or are just looking for an entertaining 20-minute conversation chalked full of great insights and a laugh or two this episode 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.

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top metrics for a Customer Service organization that span the top three goals of CS including resolving, deflecting, and/or preventing cases.During this episode, we lean heavily on CAC's background as a technical support agent for the first two years of his career, and then as the head of the Salesforce Service Cloud.The primary job of Customer Service (Customer Support) including the three below macro-level goalsResolve CasesDeflect CasesPrevent CasesWhat are the top metrics to measure the performance of Customer Service while ensuring a high level of customer satisfaction?:Cases per Agent (while maintaining a 4.5 CSAT score)CSAT Time to Resolution (mean is not as valuable - have a max)First call resolutionThere are many nuances to the above metrics including the type of call (how-to or bug fixes), the ability to effectively deflect calls that solve the customer issue, and how to measure the longer-term impact of preventing inbound cases over time.If you are thinking about or currently evaluating your customer service (customer support) performance metrics, this is a great conversation that covers a wide range of metrics, goals, and priorities for any customer service organization in a B2B technology business.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

What are the top metrics for a Professional Services (PS) leader in a B2B SaaS company? During this episode, our hosts Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top PS metrics including:Professional Services Revenue / BillingsGross Margin (%)Billable Utilization Rate ($ and Hours)Non Billable Utilization including reasonsCapacity ($ Billables and # Hours)Before diving deep into the actual metrics, Dave highlighted that PS's primary job is to "maximize ARR without losing money". A key highlight on the role of PS is that it is not primarily responsible for maximizing PS Revenue or PS Gross Margin, but rather to help accelerate deployment to subscription revenue recognition, product adoption, utilization, and customer value all leading to increased customer retention rates and subscription customer lifetime value.One of the key points that were discussed is that Professional Services should not be goaled, or incented for maximizing PS revenue and/or optimizing Gross Margin. Generating cash from PS is a strategy that companies that are not in a good cash position may use to lengthen their cash runway - but not a strategy that maximizes the enterprise value of a recurring revenue business.Attach rate is a common measurement that many B2B SaaS companies use. The most common way to measure attach rate is: PS Billings / Total ARR in a specific period, such as quarterly or annually. Being able to correlate those customers that use PS and the associated GRR can highlight how the utilization of PS has to customer retention.What % of total revenue in a B2B SaaS company is the max for professional services? Dave "CAC" Kellogg used 20% as the absolute cap on PS, measured as a % of PS revenue to subscription revenue. Dave also recommended a Gross Margin of anything above zero percent, but optimizing Gross Margin at the expense of ARR is not a good long-term strategy.If you are responsible for Professional Services in a B2B SaaS company, or are evaluating the strategic role and associated metrics for a PS organization this is a great episode to listen to.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top metrics for a Chief Customer Officer to use presenting to the board and to report to the executive team when the CCO has responsibility for: 1) Customer Success; 2) Professional Services and; 3) Customer SupportNet Revenue RetentionGross Revenue RetentionCustomer Health ScoreBillable PS RevenueBillable UtilizationGross MarginCases per AgentPost Case Closed CSATDeflectionsThose these are the high level metrics for a CCO, each function will have more detailed lagging and leading indicator metrics that Dave and Ray will cover in subsequent episodes of SaaS Talk with the Metrics Brothers.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

What are the top metrics for a Chief Marketing Officer to use when presenting to the board of directors and in a Quarterly Business Review. Dave "CAC" Kellogg and Ray "Growth" Rike discuss the below top 7 CMO metrics during this episode:Marketing Sourced Pipeline GenerationMarketing Sourced Pipeline ConversionDay 1 Pipeline CoverageDemand Generation Cost per OpportunityBrand AwarenessWebsite VisitorsSales CSATDave recently wrote a detailed blog article on this topic which can be read by clicking here."CAC" is a huge fan of the phrase "Marketing creates pipeline that closes" and dives into the detail of the top Marketing metrics during this episode.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Top 5 Metrics for Chief Revenue Officers that own the entire customer journey, including Customer Acquisition, Customer Retention and Customer Expansion process.Dave "CAC" Kellogg and Ray "Growth" Rike discuss 5 of the top metrics for a Chief Revenue Officer in 2024 including:ARR "Actual vs Plan" - the keep your job metricPipeline Performance - Coverage & EfficiencyNet Revenue RetentionCAC RatioCLTV:CAC RatioKey context to this episode, is it discusses 5 of the top metrics for a true Chief Revenue Officer, not a SVP/VP Sales with the CRO title. CROs are responsible for revenue growth across every stage of the customer lifecycle, and is a financial steward of the company focused on increasing enterprise value by leading the strategy and the execution of all processes that result in efficient, profitable revenue growth.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Rule of 40 has been the standard metric B2B SaaS investors and operators have used to measure balanced growth...will the Rule of 40 be surpassed by the new Rule of X recently created by Bessemer Ventures? Join Dave "CAC" Kellogg and Ray "Growth" Rike as they discuss the details about the Rule of X including:Foundational calculation formula for the Rule of XHow to find the "Growth Weighted" M in the formulaWhat is a good "Rule of X" scoreThe Rule of 40 has been around for over a decade - but it was missing one key variable....which is more important growth or profitability? Beyond that, if one variable is more important what are the respective weights of Growth and Profit?CAC and Growth have a little fun while diving deep into the details behind the Rule of X and the Rule of 40.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

How the Enterprise Value of a SaaS company impacted by growth rate is the topic of today's conversation with Dave "CAC" Kellogg and Ray "Growth" Rike - the result is a new metric named "ERG" - the Enterprise Value to Revenue to Growth Rate Multiple.During this episode, Dave and Ray highlight several leading public, B2B Cloud companies and how their Enterprise Value to Revenue multiples are impacted when the growth rate is factored in. With a public Cloud/SaaS company median growth rate of 21%, the median Enterprise Value to Revenue multiple of 6.1x and a median ERG of .31 - what does that mean when the ERG is calculated for public Cloud companies such as Workday, Twilio, Domo, ZoomInfo and Hubspot?If you are interested in how growth rate impacts enterprise value in a B2B Cloud company - this episode 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.

Dave "CAC" Kellogg and Ray "Growth" Rike go out on a limb and share their predictions on the Top 5 SaaS Metrics in 2024 - some are old friends and two are brand new for 2024!!!2023 was a year focused on efficient growth, extending cash runways and making progress towards profitability. Simultaneously, certain metrics became more important in correlation to enterprise value to revenue multiples - including the re-emergence of the Rule of 40 being critical to company valuations. Which metrics are Dave and Ray predicting as the Top Five for 2024:Rule of X - a growth-weighted Rule of 40ARR/FTE - the ultimate overall productivity metric for B2B SaaS companiesGRR & NRR - Why the "&" is so important to measuring retention & expansionCAC Payback Period and CAC Ratio - The GTM efficiency metric combinationERG - a growth-weighted enterprise value to revenue growth ratioThe Metrics Brothers focused on the "SaaS Metrics" predictions for this episode - but if you would like to see the more holistic 2024 predictions - take a look at Dave's @kellblog post at: https://kellblog.com/2024/01/02/kellblog-predictions-for-2024/Happy New Year to all and here is to an improving B2B SaaS environment with a balanced approach to growth and profitability!!!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the long standing, industry standard SaaS Metrics Benchmark report from KeyBanc Capital Markets, which was released in December, 2023.If you are a long-time SaaS veteran or new to the SaaS industry - this report has been the de facto SaaS Metrics benchmarking report for 14 years. This year's report includes a total population of 106 companies, and often comes up short in comparison to previous year's report. The small population makes segmenting the benchmarks by company size or ACV much very difficult - and benchmarks that are relevant to company size and ACV is critical in making them useful.We encourage our listeners to download the report and follow along at CAC and Growth break it, and several of the metrics that are included... which are primarily for 2022, and some are based upon 2023 estimates.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike continue their break down the recent Battery Ventures - State of the OpenCloud 2023 Report which includes a historic view of performance benchmarks and some predictions on how AI will impact performance metrics in the future.During Part 2 of this episode the co-hosts cover several metrics and SaaS industry trends including:Growth RatesTechnology Buyer Sentiment heading into 2024The impact of balanced growth + profitabilityBusiness model and pricing evolutionStock Option Re-pricingThe human capital impact of AI...beware Sales and MarketingThe entire report is available by clicking here.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike break down the recent Battery Ventures - State of the OpenCloud 2023 Report which includes a historic view of performance benchmarks and some predictions on how AI will impact performance metrics in the future.During this episode the co-hosts cover several metrics and SaaS industry trends including:Growth Rates Technology Buyer Sentiment heading into 2024The impact of balanced growth + profitabilityBusiness model and pricing evolutionStock Option Re-pricingThe human capital impact of AI...beware Sales and MarketingThe entire report is available by clicking here.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dave "CAC" Kellogg and Ray "Growth" Rike analyze the recently published OpenView Partners 2023 Benchmark Report which was conducted in partnership with Paddle. Interesting insights into the declining growth rates and increased customer churn trends.Key metrics and the associated benchmarks segmented by company ARR analyzed include:Growth RateRule of 40Net Revenue RetentionGross Revenue RetentionCAC Payback PeriodHeadcountRevenue/FTEThe OpenView 2023 Benchmark Report is at: openviewpartners.com/2023-saas-benchmarks-report/See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.