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Does being data-driven result in better decision-making and performance results? That was a question we asked Allan Willie, co-founder and CEO of Klipfolio which is enabling thousands of companies to do just that through the dashboards they enable.What are the primary challenges with data-driven decision-making? It starts with the data quality going into the metrics used for decisions. Once the quality, integrity, and even amount of data can drive statistically significant insights, it's important not to go crazy and become the victim of "data overload".Next, we discussed who uses the source data from tools and processes to help analyze the data and then make decisions. At Klipfolio, that is the role of business operations. Other functional operational functions, such as Marketing Operations, manage the data that flows into/out of the marketing automation system and the logic utilized within the platform. Every functional operations team needs to become data quality stewards, but may not be the function that analyzes what the data is saying. Often, business operations or financial operations may be the penultimate operations function that uses the data to help form data-driven decisions and strategies.What metrics are most important for an early-stage SaaS company to capture? Product Market Fit is the first and ONLY goal early on. How to measure product market fit? One is to measure how often a user comes back to use your product; another is to have a proactive outreach strategy to speak directly with the customers. The second category is to introduce growth metrics such as CARR growth, Revenue Growth, and Gross/Net Dollar Retention. Then in the third category come the efficiency metrics that guide profitable growth, such as CAC Payback Period and Customer Lifetime Value to CAC Ratio.Curiosity is a central theme in fostering a data-driven culture. Almost every point solution has basic analytics and reporting capability, and when coupled with excel, most early-stage companies can become data-driven. This approach will limit visualization and the ability to scale but is a great start to a data-driven, metrics-informed decision-making journey.How to ensure the data and metrics being captured are being used to make decisions? Allan highlighted it is very common to introduce metrics that may not stick. Identify those that provide the most insights and have predictive capabilities, and think about getting rid of the less. To scale, having a strategic area of focus for a specific time period that the entire company rallies around is a great way to create a data-driven culture. As an example, maybe for a quarter or two the whole company focuses on a specific category, like Customer Acquisition and identify the top opportunities for improvement as highlighted by the associated metrics, and implement the enhancements (process and/or organizational) before moving to the next strategic area of data-driven, metrics-informed" opportunity.If you are in a business with less < $50M ARR, the discussion with Allan provides many thought-provoking ideas and insights into creating a data-driven culture that translates into accelerated company success.
Marketing as an AMPLIFIER to Sales productivity!!!The quote above was the primary focus of my discussion with Mark Stouse - the CEO of Proof Analytics.Mark self-identifies as a communicator turned marketer turned SaaS CEO. Over this journey, Mark has developed a strong perspective on how to prove ROI, especially for marketing investment.What are the metrics that matter to a Chief Marketing Officer? Mark says this is very straightforward: "Marketing's mission is to help Sales sell more product to more customers faster and more profitably than Sales could do by themselves". Simply stated, it is measured by more deals, bigger deals and faster deals - Deal Velocity! Calculating how marketing measures these should be the primary point of any metric that Marketing captures and reports.When pushed on the top three metrics, Mark responded that KPIs (data) by themselves are not enough. Data is the measurement of what happened in a particular time for a specific place - ALL in the past. Analytics, specifically regression analysis, enables a marketer to predict and forecast how future marketing investments will impact Sales productivity as measured by pipeline and revenue.The B2B SaaS industry is still young when measured against other industries such as manufacturing, retail, or consumer packaged goods. As such, the maturity of using sophisticated analytics to predict the future in the industry is still in its infancy - especially compared to larger, more data-intensive B2B online companies.An example of using data on a more granular level was Ideal Customer Profile (ICP) and Pipeline Coverage Ratio. By understanding how specific cohorts perform in top of funnel conversion, the marketing ROI can be increased materially through enhanced targeting.Next, we pivoted to Mark's concept of Marketing exponentially impacting Sales productivity. Mark has an interesting take on the concept: Marketing should invest more time helping Sales improve conversion rates in the middle and bottom of the opportunity funnel versus primarily being focused on top of funnel market engagement. Mark used a military analogy where the Air Force provides air cover to the ground troops. Why does Mark believe the above? Marketing has conditioned business leaders to think that Marketing is primarily a brand awareness and engagement function versus a selling process amplifier. Mark highlighted TRUST as a key ingredient to enhancing conversion rates and accelerating deal velocity. What drives a buyer's confidence - trust is a crucial ingredient to building buyer trust. The more confidence a buyer has that a company and their product will impact their buying process, measured by win rate and sales cycle time.As a marketer, a pivotal question is what are we doing to increase the buyer's confidence and trust, resulting in helping Sales close more deals faster!If you are interested in hearing thought-provoking ideas on how Marketing can use data and analytics to enable Marketing to become an exponential multiplier to Sales productivity - this conversation with Mark is fascinating.
Sam Baker, Principal at Scale Venture Partners, has been a venture capitalist for six years. Before that, he gained operational experience at Box in both an Inside Sales role and in a Strategy and Planning role.Scale's culture has a very quantitative-oriented DNA, including having its own benchmarking organization known as Scale Studio. Benchmarking delivers reality to every Scale portfolio company and aligns the founder and the investor on a metrics-oriented approach to decision making.The first topic we approached was what metrics are most important to a Series A and Series B investor? Sam's initial response was not to rattle off a list of metrics but to discuss the importance of "context" in today's investment environment. As an example, Sam shared that the "maturity" of the company is a primary driver of how best to use metrics.Scale has identified and uses four (4) Vital Signs of SaaS that include: 1) Growth; 2)Efficiency; 3) Churn, and; 4)Burn. A small description of the four vital signs below:Growth - How quickly is revenue growingEfficiency - Quantity of revenue compared to Sales and Marketing spendChurn - Do customers stick around and buy more, OR do they leaveBurn - What is the rate of cash consumption to grow a SaaS companyWhen asked about a benchmarking framework that Scale uses - he first highlighted it depends on who is consuming the benchmarks (which role) and what is the stage and maturity of the company. Scale's benchmarking framework is very extensible to enable an increased aperture on the metrics being utilized. For example, when a company dramatically increases investment in Sales and Marketing, Customer Acquisition Cost efficiency metrics become more important.Next, Sam recommended avoiding benchmarking and metrics overload, which requires a company to identify the most important and most informative metrics to how the company is currently trending and will be trending in the near term. Moreover, be prepared to add or change metrics that are most relevant to the growth stage.Scale has a couple of unique metrics, including Instantaneous Compound Annual Growth Rate (iCAGR). The benefit of iCAGR is it provides a real-time and is most sensitive to growth or shrinkage today, versus being biased by the average effect of quarterly or annually metrics. As an example, if growth is down in the most recent quarter, but the previous three quarters had higher than normal growth it can identify potential risk or new trend in company performance.Another metric that Scale uses is "Growth Persistence" which investors use to measure the rate of growth over time. For example, if a company grows 100% one year, and then 85% in year two and 72% in year three, it would reflect an 85% median growth persistence.How to avoid "metrics overload"? This is especially important in board meetings when the "metrics creep" can often happen. First, make sure everyone knows the company's "North Star" and how each metric directly impacts the North Star. Second, gain agreement up-front with the investors and board members on those metrics that are most important, that they are presented in a manner that is easy to understand and ensure the metrics tie back to the source systems being used.Sam provides a very insightful and instructive perspective on using metrics and benchmarks to inform a SaaS company's growth journey - especially from an investor's perspective, which is so critical in the 2022 investment environment.
Everyone talks about the "Customer Journey" but often operates in stage-by-stage silos of customer acquisition, retention, and expansion.What is the Customer Journey - first, it often depends on if you come from a "Buyer perspective" versus the "Seller perspective." Ultimately, the seller is trying to figure out how to turn the buyer's meandering journey into a more liner, faster buying journey...sounds like an adversarial relationship using this model.One interesting aspect of today's buying journey is how to optimize how Marketing, Sales, and Customer Success collaborate across the customer journey. The early phase can feel disjointed to the customer as they engage with a vendor using multiple "marketing-led" experiences that are not well understood by the Sales Development and/or Sales resource, who often do not know the knowledge and experience the prospect already has from self-directed research.Does having shared goals and metrics across Marketing, Sales and Customer Success impact the customer experience? Having an "Account Energy Score" may assist in aligning the functions across the customer journey. It can also inform the probability of a prospect becoming a customer. The Account Energy score factors in signals at each stage of the journey and weight specific actions such as content engagement or activities based upon the stage of the journey, such as Customer Acquisition vs Customer Retention vs Customer Expansion.Though there is never a "magic bullet" that can guarantee a prospect becoming a customer, being able to dynamically score each point of engagement depending on the latest understanding of how each signal correlates to customer journey progress is a material increase in insights versus today's standard models.In the "tough question category," is it the seller's responsibility to follow the buyer's journey OR to try and help guide and lead the prospect to make the best purchase decision? Carson's perspective is it is better to lead the buyer through the process by understanding the buyer's actual needs and being willing to stop the process IF their solution is not in the best for the buyer.Another key point is there is NO single customer journey or buying process, so it's critical to always be listening to the prospect and align plus help guide the buyer through the process.In today's "land, retain and expand" customer lifecycle process in the SaaS industry, having a 360 degree view that is informed by every signal that impacts the customer journey is a best practice. It is also a best practice that requires tight integration of your Marketing, Sales, and Customer Success team aligned to the customer journey.If you are interested in learning more about today's customer journey, and how to use their engagement as input to your forecast, and to better inform your internal resources on the best next action, this conversation with Carson is highly informative.
Taft Love's journey to becoming a Revenue Operations leader started in law enforcement, with a pivot to starting his tech career by becoming a Sales Development Representative, on to direct sales, sales leadership and ultimately to Revenue Operations.This journey is exactly the cross-functional experience that builds a strong foundation to being a strategic revenue operations leader.  Interestingly, Taft's experience as a sales lead at early stage B2B SaaS company, PandaDoc by identifying and then having to solve operational challenges that impacted his productivity.When should a company consider a RevOps function?  Taft's perspective is that RevOps starts with ensuring the revenue technology platforms and processes are aligned and optimized to the need of the front line sales personnel.  Simply stated, start the RevOps journey with a RevTech resource and as you grow to $5M - $15M (Series B) start considering a RevOps team that has broader responsibility beyond managing revenue technology platforms.As we discussed the RevOps framework of data, platform, process and analytics Taft doubled down on the "rev tech stack" administration is the initial catalyst to creating a RevOps team.  When pressed on the traditional approach to bringing in a Salesforce administrator and then the marketing automation administrator - often positioned as a Sales Ops and Marketing Ops resource, Taft continued to support his belief that RevOps should not be the first ops resource brought into a company.Next we discussed the pro's and con's of starting the RevOps journey with an internal hire versus leveraging the expertise of a RevOps agency.  Taft's insights are that no one single RevOps resource can be good at every component of a RevOps function.  Examples include trying to have the same single resource be a platform administrator, data guru, business analyst and technical integration expert.Taft's recommendation is to bring in a RevOps leader, who is the RevOps architect and also work with an agency that can bring the right experience and expertise on an "as needed" basis.Next we discussed why Sales Development can benefit the most from a close partnership with Revenue Operations.  Sales Development productivity is directly impacted by having the right "target prospect" data, the ability to conduct high quality outreach at scale and ultimately being able to fuel the engine of company growth - pipeline development!Recent research has shown that only 49% of an SDR's time is spent on outbound prospecting because they spend the majority of their time on administrative and operational activities, such as data management, list development and contact enrichment, that are the primary domains of a Revenue Operations function.If you are considering an investment in your first Revenue Operations function or how to leverage your Revenue Operations team to increase revenue activity productivity, Taft is a great listen.
SaaS Capital - I have always loved that name and followed their B2B SaaS Research for many years.Todd Gardner was a founder at SaaS Capital, which helped lead the early days of "Debt Lending" for SaaS companies. Most recently, Todd is now the principal at SaaS Advisors assisting both SaaS companies and SaaS investors during the financing process.During Todd's career, he has reviewed thousands of SaaS income statements and balance sheets which positions Todd very well for the business and financial impact of Usage-Based Pricing (UBP) for B2B SaaS companies.The first topic we discussed was "What is Usage-Based Pricing"? The concept is pretty basic, aligning pricing to the value received by the customer. This concept has been used in other consumption-based industries, such as gas, water, and cellular phone bills.How does UBP impact the traditional use of subscriptions? Approximately 50% of SaaS companies using a Usage-Based pricing model also include an annual subscription as part of the pricing structure....a hybrid model. One interesting aspect when using a UBP + Subscription model is what is included in the subscription versus being purely usage-based charges?One of the challenges of a Usage-Based Pricing model is the increased challenge of revenue forecasting - which was one of the benefits of the traditional SaaS subscription model. Todd highlighted there is a trade-off in pricing between simplicity and value alignment. By having a hybrid Usage-Based Pricing model, there can still be the predictability of the subscription model while still having the opportunity to increase revenue as value increases for the customer.Is there a history of Usage-Based Pricing in a software subscription model? In the spirit of all things being circular, the original use of UBP was in time-sharing, which was a popular software application usage model in the 1980s. One of the challenges in that phase of subscription software was once usage increased to make the monthly cost-prohibitive or after a couple of unexpected large invoices from higher than normal/expected charges. Todd highlighted that with the introduction of the Customer Success organization, coupled with the use of product analytics, a SaaS vendor can stay in front of sustained "larger than expected" invoices and even use increased usage to re-structure the agreement to either "cap" overage usage and/or decrease the per-unit cost in consideration of a larger commitment.Todd recently conducted research that identified 6 product attributes or leverage points that suggest considering a Usage-Based Pricing model:1. Lower in the technology stack products (infrastructure, databases, tools, platforms, etc.)2. Application products that have a high Cost of Goods Sold basis 3. Use of the product is directly linked to business value (payments, eCommerce)4. Self-provisioning products (think Product-Led Growth)5. Growth and intensity of usage (high growth, heavy usage-based products)6. Value is driven by automation - such as integration/API based productsTodd has a unique perspective on the SaaS industry, informed by reviewing and lending to 1,000's of SaaS companies, and his recent research on Usage-Based Pricing across the SaaS industry is the basis for an information-packed conversation.
Kyle Porter, the founder and CEO of Salesloft, started the company over ten years ago. The goal was to have sellers "loved by the customers" they serve.An initial observation was that it was difficult to deliver a personalized customer engagement experience at scale, thus the catalyst for Saleloft and the Sales Engagement category.The future of Sales Engagement? All professionals who are responsible for driving revenue will be able to log into a single system, have a pre-defined queue of activities that is populated and prioritized automatically by the platform, automation to assist in executing those activities and measure the success of those activities...all while using the activity success to learn over time.The ultimate result, eliminate the subjective approach to prioritizing activities while increasing operational efficiency by automating a majority of those activities.Why has Sales Engagement traditionally been a tool for Sales Development, and will its use be expanded to other Go-To-Market roles? Originally it was easier to "codify" the SDR role because is was such a new role. Going forward, using machine learning and AI, Sales Engagement utilization will quickly evolve in the Account Management and Customer Success functions.One of the most significant challenges that Sales Engagement Platforms have addressed is the amount of time an outbound sales resource actually invests in outbound prospecting. Recent research says that Sales Development Representatives are currently only spending 49% of their time on outbound prospecting. Increased utilization + enhanced functionality in Sales Engagement Platforms will reduce the time invested in manual, internally facing tasks.Can a Sales Engagement Platform impact the middle of an opportunity funnel? Kyle's vision highlighted a "post-loss" cadence as one example of how a Sales Engagement Platform is used at the bottom of the funnel to inform future opportunity management. Another example was a post won communication cadence from the CEO to new clients.Customer Success is a critical, high-value function in the B2B SaaS industry - how can a Customer Success Manager use a Sales Engagement Platform? One example was using product analytics, such as an account engagement or usage, and using specific signals to launch an email to assist users in an automated sequence.How to measure the return on investment on Sales Development? Kyle's perspective is that moving the goal beyond scheduling a single meeting as the primary objective, such as scheduling 10 meetings in a large strategic account to gather information that can be used by the strategic account AE to schedule a meeting with an executive based upon the discovery information the SDR gathered across multiple meetings.One of the key benefits of a Sales Engagement Platform goes beyond a single user but to a team-based outreach program across two or more resources, such as the SDR + AE.We closed the conversation with Kyle on the key challenges and obstacles that Salesloft faced in becoming a leader in the Sales Engagement Platform category. The one that Kyle focused on was the need to develop his leadership skills. "Learn faster than the rate of my own experience" was a phrase Kyle used to become a continuous learner and not be limited by negative labels - such as "he's a $1M - $10M ARR CEO". Kyle uses 360-degree reviews as one strategy to learn from his company where he needs to grow. Other tactics Kyle uses to fuel his continuous learning are forums with other CEOs, having a CEO coach, and reading.If you are using a Sales Engagement platform or want to learn from someone who has scaled to $100M ARR+, Kyle Porter is a great follow and listen!
The Great Resignation has been a trending topic for six months - how does a B2B SaaS company prepare for  the impact? Sales Enablement is one strategic function that will be a key component to combat attrition and ramp new sales hires to productivity...quicklyDave Lichtman has been a sales trainer, a sales professional at Salesforce and a sales leader at Sales Enablement platform vendor, SalesHood.We first discussed how Sales Enablement evolved during the pandemic.  First, most sales playbooks had to be thrown out the door, and companies had to re-train and enable a new "virtual sales process" and Sales Enablement was front and center to that new reality.Dave has seen compensation packages rise dramatically due to the increased need, and many Sales Enablement professionals are seeing total comp packages in the range of a Senior Director or VP Sales.When to first deploy a Sales Enablement function?  First, ensuring Product Market Fit and having an initial repeatable sales process need to be established.  Once that happens, it is good to invest in Sales Enablement to scale sales....revenue level is secondary to ensuring these two factors are solid.How has the delivery model changed for Sales Enablement?  The common foundation was ensuring you could train new sales hires virtually,  thus requiring a more robust technology, including a sales enablement platform.  Another key trend due to the current levels of sales personnel attrition is ingesting larger groups of new hires simultaneously, which requires a more compressed time to productivity.Sales Enablement today is aggressively using a hybrid of virtual, instructor led + digital self-directed learning. So what is the "profile" most in demand for Sales Enablement resources today?  Dave shared the top "attributes and experiences" including:  1) Direct sale experience is a plus but not a must...what is a must is being a student of sales. 2) Typically, the first hire is a "team of one" and having previous Sales Enablement experience in standing up the first Sales Enablement team is a critical, must have skill set.  Being a Sales Enablement employee is a larger organization is not applicable to standing up a Sales Enablement function. 3) Curiosity is probably the most important personal attribute, while being a "pleaser" who thrives on helping people WHILE also having the ability to gently push back on leadership when a requested direction may be sub optimal.  This can lead to taking on too many responsibilities ultimately leading to failure.Sales Enablement is a team sport, and as such being able to build strong relationships across functions is critical to sustained success.  Has Sales Enablement evolved beyond sales, and expanding to functions such as Sales Development, Customer Success and Account Management?  A minority of companies have started to expand Sales Enablement to include post sales resources, though the C-Suite has started to view Sales Enablement as a strategic function, and broadening the purview of Sales Enablement.Dave sees Sales Enablement primarily living under and reporting directly to the Chief Revenue Officer.  This will enhance alignment of Sales Enablement to the strategic priorities of the CRO - in Dave's team closer to the sun is an important key to Sales Enablement success.How to measure the ROI of Sales Enablement?  Measure both leading and lagging indicators.  Start with the purpose of each program and align to leading indicators such as close rate, competitive win rate, discount rates, ACV, etc,If you are a Sales Enablement professional, thinking about investing in Sales Enablement for the first time or simply looking on best practices to increase Sales Enablement impact on revenue,  the discussion with Dave Lichtman is highly instructive.
Anna Baird is the Chief Revenue Officer at Outreach, the leading Sales Engagement Platform.  Anna started her career as a partner at KPMG, and continued her career journey across multiple “C-Level” roles including CFO, COO, President and now CRO.The first portion of our conversation centered on the maturity of the Sales Engagement Platform category.  Anna shared that across all B2B Sales, that the category has only achieved a 2% market penetration, as measured by the number of B2B sales professionals.What started as a point solution for Sales Development, top of funnel prospecting tool, Sales Engagement has now evolved from the B2B Tech industry as an entry point to how do you impact the entire Go-To-Market team across the entire customer journey.Research shows that 51% of B2B SaaS companies have invested in a Sales Engagement platform.  Anna sees the expansion opportunity for Sales Engagement to be both across every Go-To-Market function and across multiple new industries beyond the technology industry.  By automating the workflow associated with every point of customer engagement across the customer journey, data capture into the core Customer Relationship Management (CRM) system of record. Expansion revenue is becoming a larger component of ARR growth in the B2B SaaS industry. As a result, the Customer Success function is becoming a more prominent user of Sales Engagement, to manage expansion and renewals at scale. Anna’s vision is that Outreach becomes the primary dashboard that any GTM professional enters and lives their day, including highlighting the highest priority activities and tasks for the day - using predictive, revenue intelligence within the platform.  IIn fact, the vision is much larger, because the pain that exists goes far beyond tactical activities, it’s how to view every customer engagement point is available in a single, integrated platform.  In fact, Outreach is expanding their category name to the “Sales Execution Platform” - going beyond engagement to execution across the entire customer lifecycle.Anna’s vision evolves Outreach into a “System of Execution” which is more about customer process execution versus a datastore of customer information.Next, we pivoted to how revenue leaders can leverage “metrics and revenue intelligence” to make better decisions. By aggregating all customer conversations into a single environment, it becomes easier to apply revenue intelligence to all of the signals from customer engagement points to prioritize which signals are of highest priority.Anna also shared her perspective on the importance and priority of Revenue Operations. Anna, calls the role “Revenue Excellence and Operations”. This role is responsible for both the strategy and then the execution of revenue processes. Having Revenue Operations being responsible for the operations and administration of processes + the platforms drive revenue performance.  In fact, the head of REO at Outreach is intimately involved in almost every strategic, revenue centric company level discussion.Anna provides a highly strategic and insightful perspective on how technology is critical to enhancing Revenue Execution across every B2B Go-To-Market organization.
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.
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.
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.
Usage-Based Pricing is trending across the B2B SaaS and Cloud industry.  This pricing model is not new and is also known as Consumption pricing as the cost of the service or product increases as the "consumption" of the product increases.Saas has traditionally become known for the use of subscription pricing, which often associates an annual subscription cost for each user of the product.  In this scenario, the cost would only increase as additional users were assigned a "seat" and were then able to use the product in an unlimited fashion for that one annual "subscription" price.One of the challenges that come with the use of Usage-Based pricing in the SaaS industry is how to compensate salespeople for both the acquisition of a new customer, but also for the actual usage and relating revenue over time.Rachel Parrinello leads the Sales Compensation practice at The Alexander Group and works with many leading B2B SaaS companies that use a Usage-Based pricing model.  Based upon her unique insights into and experience with multiple different compensation models and plans, we dove right into the evolution of sales compensation plans within Usage-Based pricing environments.Rachel uses an acronym called ILAER model which stands for Identify, Land, Adopt, Expand and Renew model.  In this environment, there are multiple variables to consider in the design of compensation plans such as how to compensate retention, renewals, and expansions - then in the context of a much smaller value to the initial contract value.Four basic types of pricing models in Usage-Based Pricing environments:1. No contact and no minimum contract - Pay as your Go2. Uncommitted contract - There is a contract but no minimum commitment to usage or revenue3. Committed contract - Prepaid pool of funds that will be used against usage over the agreement term, often a year.  The agreement includes the minimum usage, price per unit of usage, and the associated minimum revenue over the agreement4. Hybrid (committed + non-committed) contract:  A minimum usage is agreed to, however the projected usage is typically forecasted to be much larger than the contractual minimum and reduced unit pricing  is predetermined within the agreementWe then moved to the "sales compensation" plan for the above models.  Rachel started with the importance of identifying the "persuasion" event and ensuring the sales compensation plan is aligned and rewards for achieving the persuasion event.  The persuasion event may be the original customer acquisition event and paying for a part of the "projected revenue" be paid at the time of the persuasion event and additional compensation as the actual usage and associated revenue happens.The conversation quickly moved to the different roles involved in the acquisition and growth of the customer.  One traditional model is the hunter/farmer model where the hunter is responsible for acquiring the customer and the farmer is responsible for growing the customer after the initial acquisition.  A new role, called the "rancher" has evolved in the Usage-Based Pricing world, and they have the responsibility for both acquiring the customer and growing the customer.In the "rancher" model, one defining variable to determine if this is right for a company, it starts with the amount and level of information that needs to be transferred after the initial close.  If the knowledge and level of customer information are large, consider using the rancher model, at least for the first 12-24 months after the initial close.If you are a participant or leader responsible for sales compensation models in a Usage-Based environment,  Rachel is a must listen!
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 $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!
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.
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.
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.
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!
Have you read Crossing the Chasm - the Go-to-Market bible for high tech leaders for over 30 years?Crossing the Chasm, written by Geoffrey Moore, was first published in 1991 introduced the Technology Lifecycle Adoption Framework.The basic concept of Crossing the Chasm is that there are five stages in the Technology Lifecycle Adoption curve, and each stage has a specific "buyer profile" at each stage of adoption:Stages of the Product Lifecycle Adoption Curve:Innovators - Get excited about the technology itselfEarly Adopters - Will bet early on the technology to gain competitive advantageTHE CHASM - The critical cross-over point from a niche market to a large addressable marketEarly Majority - Not genuine believers in technology - much more focused on a high priority problem Late Majority - Must be convinced the herd has already adopted and the ease of implementation and adoption outweighs the riskLaggards - The last phase of tech adoption - the goal is to neutralize, not convince them to changeBuyer type for each stage of the Technology Lifecycle Adoption Curve:Technology Enthusiasts - The first people to adopt any new technologyVisionaries - Have the insights to match up emerging tech to strategic opportunityPragmatists - Looking for incremental improvement versus innovation with higher riskConservatives - Believe more in tradition/status quo versus discontinuous innovationSkeptics - Believe new technology is synonymous with unintended consequencesBowling Alley - the strategy to increase the probability of success when crossing the Chasm to penetrate the early majority Knock over the first "use case" and then move to adjacenciesSame use case in a different industryDifferent use cases in the same industryThe first focal point of the bowling alley requiresWhole productWord of mouth community which requires 4-5 customers in the same industry as advocatesInside the Tornado - Result of increasing awareness of a technology segment + budget exists for this category. A great example - Conversational IntelligenceThe breadth of the vendors' ecosystem is critical to becoming the leader inside the Tornado.MainStreet - the stage where the majority of potential buyers knows they need to invest in this category The stage of Cloud and SaaS adoption todayConservatives have a lot of power in this stage - and ensuring customer success and business value received is critical to continued growth. How to manage a business at each stage of a company or products adoption curve?Zone Management - governs the management model at each stage of product adoption:Performance Zone - Main Street market with predictable growth measured by revenue growth, margins, and market shareProductivity Zone - process focused on improving the efficiency of every function to optimize profitability.Incubation Zone  - Represents the start-up mindset and is about establishing Product Market Fit and "Power" in the marketplace by winning real customers and beating the competition.Transformation Zone - Basically conducting open-heart surgery on your existing business because the world has changed and your product is viewed as yesterday's news.Geoffrey Moore and his book Crossing the Chasm are legends in the technology industry marketing landscape. The principles from Crossing the Chasm are as effective in the Cloud in 2021 and beyond as they were when the book and framework were first published!
Conversational Intelligence (CI) is a technology that materially enhances the effectiveness of every B2B Sales professional.CI has quickly become a "must-have" component in the B2B sales tech stack and has become a feature in most Sales Engagement Platforms...WHAT is the future of Conversational Intelligence?Our host, Ray Rike, recently spoke with Amit Bendov, Founder and CEO of, to discuss the vision and future of Gong and the Revenue Reality.Amit's premise was "is there a better way to get market feedback" from every communication channel into the CRM without requiring manual data input.What was the initial catalyst for Gong and CI? Amit's previous company hit a wall and had revenue growth challenges for two consecutive quarters. After scouring every record he could in the CRM platform and speaking with the leaders across sales and marketing, he quickly realized there was no single version of the truth!Recently, Gong introduced the vision of "Revenue Reality" which is the mission to help companies understand the reality of their market and their market interactions. Unlocking the power of this insight is behind the next phase of Gong's evolution.Conversational Intelligence goes far beyond "recording conversations". The higher order of value is to gain additional insights into what the conversations are foreshadowing and then surfacing those insights without human intervention.Seventy percent of Gong customers have expanded the use beyond sales and into the post-sales organizations, including Customer Success and Product Management. These insights allow the product team to be "served up" the most relevant comments and insights from customer interactions with any other function. Leveraging conversational intelligence dramatically increases the product team's ability to benefit from direct feedback from the customer, without listening to a 30-60 minute conversation, and to identify common themes and trends across multiple customers and even buyers in the prospecting phase of the buyer's journey.One of the most intriguing parts of the Gong ecosystem is Gong Labs which surfaces insights from millions of interactions across thousands of companies. One example of a finding was that multi-threading the sales process across multiple individuals, including having a C-Level executive from your company in the process, DOUBLES the win rate. Additional information that Gong serves up that comes from their proprietary data is the number of questions that a salesperson asks during an introductory or discovery that predicts the highest probability to become a customer. Another interesting insight is that the more time spent on speaking while presenting a "PowerPoint" has an inverse correlation to win rates.One final insight is that during a discovery call, the close rate dramatically increases when NO slides were used, and the prospect engagement level rises. When using slides/presentations, the salesperson spends 25% more time speaking and asks 21% fewer questions!"Accept the Losses" is a comment Amit made in a recent LinkedIn post. The story behind this comment is that you can invest far too much time in understanding the primary reason you lose a deal and even identify false positives in the analysis. The primary goal behind this comment is to "simplify" the value proposition and reduce the number of variables that can lead to a loss. For example, Gong focuses on why their solution is BETTER, but it is not the low-cost solution - thus, knowing they will lose a few deals due to price is an acceptable revenue reality.Amit Bendov is a true leader in the B2B SaaS industry, and our conversation surfaces many great insights and ideas to accelerate revenue growth and gain revenue reality!
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