“When it comes to

tracking metrics for

subscription businesses,

traditional systems just

can’t account for the

whole picture”

Metrics That Really Matter

How To Drive Cross Functional Accountability?

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Bart Hacking

CFO, BetterCloud

Parveen Nandal

VP Finance, Zuora

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Bart HackingChief Financial Officer

BetterCloud

BetterCloud is the first

Management & Security

Platform for SaaS applications

A single application for IT

to manage all applications,

users, groups, files, privileges,

and more.

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Raised $47 million from leading investors such as:

Founded in 2011, 150 employees in NYC and Atlanta

3,000+ customers representing 4 million+ users

About BetterCloud

The rapid growth of enterprise

SaaS technologies

over last 15 years

presents opportunity for

increased productivity & output

But it also creates growing web

of interconnectedness &

complexity for IT departments

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We are now in the age of the SaaS-Powered Workplace

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EMPLOYEE

SaaS is now the system of record.

LEGACY TECHNOLOGY SaaS APPLICATION

CUSTOMER

IDENTITY

FINANCE

INTERNAL COMMUNICATION

EMAIL

CODE

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From a management perspective IT is still at a loss

● Minimal transparency

● No direct access to OS or database

● Only the control features natively available

● Complex, dynamic, and distributed

“Gartner, The State of Cloud Security, June 2017

Gartner recently described SaaS management as having:

View user’s activity, files, and privileges across applications

Take action across SaaS applications from a single hub

Build custom, cross-application roles for every administrator

Build custom sequences that match existing cross-application processes

B2B, 100% recurring revenue business

Land & Expand GTM Strategy

Sales & Marketing Org Structure

(Marketing, Sales Dev, New Sales, Customer Success)

Heavy Continued R&D Investment

our businessmodel

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Where GAAP accounting inherently backward looking, SaaS model

predicated on future expected returns

• ARR & ARR Growth (vs GAAP revenue)

• Unit Economics (vs Profit & Loss)

Average revenue per account (ARPA)

Gross profit margin

Payback period

LTV:CAC

Magic number

Retention rates (logo, ARR, layers of cake)

key metrics

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Find Retain & Grow

framework To Measure and Drive Growth

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Acquire

• Framework aligns to the customer journey

• Following metrics are how we break down, measure, and optimize the

sales & marketing funnel into microsteps

● Newsletter sub add, losses, net change

● Email open rates, click through rates

● MQL generation

● SDR activities & conversion rates

(calls > connections > meetings set >

meetings held)

● AE prospecting activities &

conversion rates

Identify, engage with potential prospects

Find

● How do we educate the market?

● How do we create awareness?

● How do we fill top of the funnel?

Metrics

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Questions

Create opportunities, move prospects through the sales funnel

● Opportunity creation ($, #)

● Pipeline coverage (as multiple of ARR goal)

● Pipeline concentration (by size segment)

● AE activities

● Sales cycle

● Avg & median pipeline days-in-stage

● Count of close-date pushes

Acquire

Metrics

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● Are we creating enough pipeline to meet

sales goals?

● What is the health of our pipeline? How

“clean” is our pipeline?

Questions

● Quota and quota attainment

● Conversion rates (deals & dollars)

● AE earnings as % of attainment

● New ARPA

● Closed lost by reason ($, #)

Convert prospects into new customers

Acquire (cont’d)

● How efficient is our sales funnel?

● What are the outcomes? How efficient are

those outcomes?

● How & where can we improve?

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MetricsQuestions

● Engagement . . .

○ w/ the application: logins, feature use,

actions run, power users vs least engaged

○ w/ Customer Success: HV activities, QBRs

○ w/ Support team: tickets (open, resolved),

bugs (open, resolved), response time

○ w/ Product team: feature requests

○ w/ BetterCloud: surveys, event attendance

● Customer happiness

○ Customer satisfaction

Retain . . .

● How engaged are we with our customers?

● How engaged are customers with us?

● Which customers are at risk to churn?

Metrics

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Engage with customers, identify and mitigate churn risk

Questions

● Feature usage data

● Domain (logo) retention

● ARR retention (net of churn, upsell)

● Layers of cake (cohort analysis)

Identify upsell opportunities, net ARR expansion

. . . and Grow

Metrics

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● In addition to engagement, which

customers fit our ICP?

● Is ARR for a given cohort expanding

over time?

Questions

• for Entrepreneurs / Pacific Crest Private SaaS Company survey

• Bridge Group 2017 SaaS AE Metrics Report

• Zuora’s annual CFO Survey

Build portfolio of sources for benchmarks, measure, & optimize

Benchmark, Benchmark, Benchmark!

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Parveen Nandal

Vice President, Finance

Zuora

The Changing Business Model

the customer is at the center of everything

finance needs to be laser focused on a new set of metrics

the new business model is much more complex

what it means to own this new business model

our businessmodel

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0%

100%

50%

ARR

Break

Even

Invest in Field & Grow

FasterOR

Recurring Expense Growth Expense

Sales,

Marketing, Customer Success

Sales,

Marketing, Customer Success

COGS, G&A,

R&D

ARR

Growth Expenses

• Incurred to maximize ARR

• Sales, Marketing and Customer

Success

Recurring Expenses Margin

• Incurred to support existing install

base and organization

• COGs, R&D, G&A

key metrics

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• ARR

• Growth Efficiency Index

Growth Costs / increase in ARR

• Recurring Expenses Margin

1- Annualized Recurring Expenses / ARR

framework To Measure and Drive Growth

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Pipeline

Metrics

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● How do you drive pipeline?

● How do you measure it?

● What does the funnel look like?

● Do you have enough coverage?

● Pipeline by stage

● Conversion rate

● Coverage ratios

● Demand gen efficiency

● Cost per opportunity created

● Sales cycle

● Quota attainment

● Ratios by various functions (per rep)

● Overall cost per rep

● How do you structure and model your

sales org?

● How do you measure productivity?

● How do you build predictability?

● How do you incentivize behavior?

● Is the org operationally efficient

Acquire

Metrics

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● Time to Go-Live

● Implementation churn

● Margins

● Ticket volume and resolution time

● Transaction volume

● CSAT score

● How do you on-board a customers

successfully?

● What is the measure of successful

implementation?

● What are the SLAs for support?

Deploy / Run

Metrics

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● Who owns renewals?

● How do you minimize churn?

● What causes churn?

● What is your upsell strategy (land and

expand)?

● Net Revenue Retention

● Cohorts analysis

Expand

Metrics

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thank you.

The effects of a security or insider breach are detrimental

81%

80% of companies over a month to contain insider-related incidents

Ponemon institute

It took

$2.3million annually on negligent and careless employee or contractor incidents - an average of $207K/incident

Ponemon institute

90% of the total business impact on an organization, and will most likely be experienced two years or more after the event.

Deloitte

of IT professionals say they experience a significant challenge managing SaaS apps

BetterCloud’s 2017 State of the SaaS-Powered Workplace

Orgs spend

“Hidden” costs can amount to

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2007 Shadow IT emerges; NetSuite IPOs“SaaS Apps Being Deployed by Business Units, Not IT”- TechTarget

We’ve come full circle.

2009SaaS creates problems for IT”The Challenges of Managing SaaS

Projects” -CIO

1990 IT controls on-prem software

2016IT changes its approach

“Parthenon-EY’s research indicates that CIOs are feeling a loss of control, but are beginning to find ways to take that control back.” -CIOs and

Their Shifting Relationship with SaaS

2011 IT starts losing control“Is SaaS a Threat to CIO Control?” -Information Age

2002 IT regains control“CIOs Take Back Control of Enterprise Projects from Consultants” -CIO

2017IT starts to control SaaS

“The CIO Must Take Charge of the

Organization’s Application Portfolio” -IBM Security Intelligence

1998-1999NetSuite and Salesforce

are founded

2004Salesforce IPOs

2001Consultants, not IT, lead software implementation“How to Install ERP Without IT” -TechRepublic

2014 IT increasingly loses control”Business Users Bypass IT and Go Rogue to the Cloud” -ComputerWorld

2015 IT admits hard truths“CIOs Admit They Are Concerned About SaaS Management”-Computer Weekly

CUSTOMERS

3000 customers of all industries and sizes

60+ countries

BetterCloud By The Numbers

PRODUCT

5billiondata objects managed

12M+actions taken

900MAPI calls made a day

COMMUNITY

Daily IT Newsletter with 100,000 subscribers

A Slack Community of 1400+ IT professionals

Customer Customer

Acquisition

framework To Measure and Drive Growth

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Lead

Generation

Pipeline

Creation

Customer

Success

GAAP accounting inherently backward looking (lagging)

why new metrics?

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