Janis Zech: Hello, and welcome to another episode of the RevOps Lab Podcast. I'm here with Philipp, and our guest today is Sarabeth Scott. I hope I pronounced your name correctly.

Sarabeth Scott: Yes. That's a mouthful. No. I'm really bad with names, so great to have you on.

Janis Zech: I think we first saw you at RevOps AF in San Diego where you did a great panel with Hillary from Insight Partners on metrics and board reporting. And actually today, we wanted to talk about that exact topic. I mean, you've been a VP at Camunda, Tether, Talkwalker, Upkeep. Right? Like, you have a lot of experience, and you recently joined a private equity company. So maybe tell us a bit more about that role, then yeah, we dive in and do basically board reporting best practices today, which is gonna be a lot of metrics and why they matter. So I think it's gonna be great.

Sarabeth Scott: Well, thanks for having me. I really appreciate you being here. I've been following your journey for a number of years. So I am super excited to be here. But yes, I did — I just made the switch from being an operator and kind of jumped over to the investment side. Camber is a growth equity company. So we are a little bit of a mix between venture and PE. We're really focused on companies and the investment profile that we originally targeted were very PLG heavy companies that had opportunity to grow and scale even more with, you know, kind of adding that sales motion on top. So my role is net new to the organization. And I'm working with our portfolio companies to kind of spend time on their sales teams and efficiency and CRM, you know, kind of like how they're supporting the whole process — and that's growing from just sales, but all the way across the funnel into RevOps. So that is the switch that I've recently made, and it's been an interesting one. It's really an interesting thing to move from being an operator to not being an operator. So I'm still getting used to that.

Janis Zech: Yeah. Very much related. I spent some time in VC and yeah, definitely like operating a lot. So hence, it's not every day, not every hour, I must say, as we all feel sometimes. Right? Like, especially not — I mean, I think this board reporting topic is obviously top of mind. I remember at the last RevOps AF, I actually met someone and she was there taking holidays from Israel, also very well known in RevOps. And she was basically saying, oh actually, I'm at a conference that I booked privately, but my CEO just called me and needs the board reporting pack until Sunday end of day. And I think we've all, like, in RevOps have had these experiences. And so, I mean, I think we talked about board reporting with John McMahon. He's been on various boards. And today, what we wanna do is really like a deep dive around what are some of those board metrics and how should you think about the core frameworks? So maybe let's start with the framework. How do you think about board reporting metrics in general? And then let's maybe dive into the specifics, like sales, marketing, customer success.

Sarabeth Scott: Sure. So generally, overall, I've been involved in preparing board decks for many years in many different companies. RevOps usually takes either the lead or has a very, you know, kind of big part in producing that information. The couple things that I found generally — one, you gotta stick to a format that the board will expect. So consistency every board meeting is really critical, so that they know what they're gonna see, and when they look back, they have a way to compare. And really, like, the opportunity in the board is — you may have a different narrative for every meeting, depending on what story you want to tell or what strategy you're employing and how the numbers support that. And you can do that with narrative and the different things that you call out, but the metrics should largely be the same and consistently reported every meeting. So that's thing one. And thing two that I've kind of recently come into as I've been thinking through how to build out what the board reporting — kind of the customer journey or go to market holistically board reporting looks like for our portfolio companies as we're trying to put some standardization and make it easier for them to report to the board in a consistent way. And so as I started to think about, okay, what is the framework that we can put together here? You know, I was like, let's stick to the basics. These are smaller — the companies that we work with at Camber are smaller, less sophisticated. Well, they're kind of earlier stages — say sophistication or not — they're kind of at their early side of growing a sales team, and so their sales organizations are usually smaller. But we also need to pay attention to the PLG metrics and how those things play together. So the thing that I was thinking about is how can we do this in a way that drives consistency, but that when we roll it out to teams, they understand why — kind of the purpose of it. And so I ended up organizing it around different questions that the board typically asks. And so it's kind of like this framework that is like, okay, for the sales team, are we hitting our targets? Well, we wanna see bookings versus plan and so on and so forth. So kind of thinking about like, what are the key questions that the board typically asks when you're talking about the go to market function and the efficiency of it.

Janis Zech: Yeah. I love it. I think the consistency piece is crucial, and then also the story piece is crucial as we all know. Right? Like, the reporting might not even be fully discussed every board meeting. Right? Like, it might be, you know, three, four topics that you wanna touch on. Right? So that's kind of the story part. But at the same time, as soon as you hit the growth stage and then if you have PEs involved, they also — I mean, even if they don't talk about it to us in the board meeting, they'll look through this in detail. And we work with a bunch of, you know, Vista Partners and Apex and Eurazeo backed companies as our customers. And, you know, when you see their reporting packs, it's quite extensive, and they do care a lot about it. And I think why this is interesting is because that is actually what really best looks like from my point of view because they do have a lot of granular details versus most of the venture capitalists that don't really go as deep. So I think you're really in the middle of that, and I think that's super interesting because, obviously, it can also — right, like, it's always in context of, like, what size are you at and how many headcount can you actually devote to just, you know, doing the reporting piece. But maybe we can just walk through the different questions and then talk a bit about, like, the metrics that you would recommend to look at because I think that would be super helpful. So maybe we start with sales. I mean, what questions are typically being asked and then we can just walk through that.

Sarabeth Scott: So I'm sure others will have their opinions and have other questions that they think should be included, but just kind of starting at the high level, the things that I came up with were — one, are we hitting targets? So super easy. What's your bookings versus plan number? However you wanna show that. And then what's your overall quota attainment? And usually, like, a quota distribution. It depends on how big your sales team obviously is, but understanding how many of your reps — if you have ten reps or twenty reps or fifty or a hundred or a thousand reps — what's the percentage of quota attainment that each one of those is, you know, kind of banded quota attainment. Will we hit future targets? Is the next question. And that's all around pipeline generation, pipeline coverage, and forecast accuracy. And the one thing that I would say about pipe coverage is because you always hear, it's three to five x, it's three to five x — I would very much encourage people to really do some thinking and some research around what is normal for the type of business that you're in. If you're selling to SMB businesses and your sales cycles are less than thirty days, pipe coverage means something very different. So then you have to move toward looking at how much of our pipeline do we create and close in a month and, like, understanding the historical trends there to give you a better read on are we pacing to where we need to be. So I say pipe coverage, but I would just issue that word of caution of, like, make sure that you're applying the right coverage rates for the type of business that you have and the product that you're selling.

Janis Zech: I actually remember this. You had this conversation also on RevOps AF on stage on the pipe coverage, and it definitely left an impression on me because we also calculate pipe coverage — we actually changed parts of our product to not highlight two point five x as, like, best practice anymore. Like, at least a disclaimer that you need to basically — the best way, I mean, curious what you think about it, but like, so as a company, you should basically look at, okay, what pipeline coverage did you need historically to actually hit your targets. Right? And then this is probably, like, a best practice, and then you should slice and dice it based on different products, geos, however your sales team is operating, however it's set up. But that's essentially then the right approach. Even like a pipeline coverage of zero point nine or zero point eight could theoretically actually be okay if for some magical reason you always, like, have a team that pulls out sudden big deals out of some, like, hidden compartment.

Sarabeth Scott: Definitely. That are probably not in the CRM or if they are, they're in a fraction — the amount is a fraction of the amount.

Janis Zech: Oh yeah. Mhmm. Yeah. Yeah. No. But it's a good point because like at Camunda, we would always look at our pipe coverage coming into a quarter, and we were never over two x.

Sarabeth Scott: And usually it was somewhere between one point five and two x. And that was because we were walking into every quarter with really late stage pipe. So it matters — because we had much longer sales cycles because we were selling enterprise. That's why I say all those factors play a role into how you define what good looks like in terms of pipe coverage and pipe gen and kind of pipe progression. So all of those factors need to be applied. To your point, like, all of these metrics that we're talking about — sorry, I'm gonna take a sidestep for a minute — these are the basic metrics, but you can slice and dice these in whatever way is meaningful to the business. So if it's geo, if it's persona, if it's, you know, industry, whatever that thing is that is driving your business, it's really important. We have one of our portfolio companies that's really, you know, like they're moving up market. So kind of SMB mid market enterprise is a big thing for them right now, but also the platforms that they connect into. So they're, you know, a tax provider, a sales tax provider. And so are they getting business from Shopify, from WooCommerce, you know, from where is that coming? And then they can — that's important to them so they know where to go. So anyway, I guess my — too much detail — but the point is that all of these metrics should be applied in whatever kind of matrix that makes sense for your business.

Janis Zech: Yeah. I know. Got it. I mean, quota attainment — I think also, like, you know, do you track that against everyone or only, like, do you only include fully ramped reps?

Sarabeth Scott: Quota attainment is pretty much, like, you're really only looking at your fully ramped reps, but it's also helpful for the board to understand how many reps you have in seat that are ramping and what that period looks like so that you understand — because that goes to another metric that I'm gonna get to in a minute, which is kind of what was your planned capacity versus your actual capacity. So every year, we all know we go through the process of understanding here's our bookings plan, how many reps do we need to have coverage on that plan plus a little buffer. And it's great. At the beginning of the year, you have your whole thing mapped out. Well, then somebody leaves or somebody isn't performing well or whatever it is, or you can't get good reps hired, so you fall behind in a hiring plan. And so the understanding of that dynamic of what your capacity is to what your planned capacity is is an important metric, and that is a part of this list for sales. Sorry, I'm jumping around.

Janis Zech: No. No. But if anyone is interested in that topic, I mean, definitely check out the episode with John McMahon. I mean, we talked about that at length. Right? This is especially — I mean, if you scale a MongoDB or Snowflake and you hire hundreds of reps, right, this becomes basically the de facto, like, Achilles heel. And yeah, I mean, just really good episode, I think, to recommend. But okay. So we had, like, are we hitting targets? Will we hit future targets? What's the third question you think of?

Sarabeth Scott: Yeah. The third one is, is the sales motion efficient? So are we closing business the way that we believe we should be based on historical data and, you know, kind of industry norms? So when that category is your ASP, very simple, your sales cycle, what are your conversion rates? And you can look at conversion rates in terms of from SQO to closed won, you can look at it operationally. You should be looking at the full funnel conversion, so you understand where deals are leaking and things like that, but that's much more in the weeds than for the board. I think an SQO to closed won conversion rate gives you a good picture. Some people look at win rates only. I think the two side by side are actually somewhat interesting. So win rate being just of the total number of deals closed, how many were won and how many were lost. But the conversion rate really tells you the quality of the pipe. And then of course CAC and CAC payback, which also shows up in marketing, obviously. So those are kind of the efficiency metrics. Like, again, sticking to the basics. These are all metrics that we've all known forever and ever. They're really indicative of how the business is moving, especially when you put it in conjunction with, hey, our goal this year is to move up market. And so because we believe we can have higher ASPs, our sales cycles may be longer. Well, if you start to look at that trend month over month over month, you'll start to see that combined with what your bookings are in that segment, blah blah blah.

Janis Zech: Okay. So, is the sales motion efficient? Right? Like, I personally love CAC payback a lot. I think this is actually a great metric. What if — if you think of the sales metrics, right, what are some other questions you're asking yourself?

Sarabeth Scott: So the other thing is, is the team healthy? So this is getting to that capacity versus planned capacity. And then what is your average rep productivity? I've been in businesses where — and that also is kind of in conjunction with your quota attainment. If your overall quota attainment is low, then your overall rep productivity is likely also low. But if you have reps that are performing — you know, if you have at least half of your reps that are performing quite well, it can buoy up the overall rep productivity. But that's a number that I actually wasn't necessarily that tuned into until I got into some of the bigger organizations — Upkeep and Talkwalker and then Camunda was a big one for us. I mean, average rep productivity there was over a million euro a year. So it was quite strong, and that brings an interesting dynamic to the conversation around goals with finance when you have that strong performance with rep activity. And so you also — I think it's interesting when you look at rep productivity to make sure you're looking at tenure as well of those teams.

Janis Zech: Yeah. Yeah. For the rep productivity, do you only look at the financial metric, like, kind of like output, like, in deals closed won, or do you look at activity metrics as well?

Sarabeth Scott: Like, I think you have to look at both. In some companies I've been in, actually in some of the bigger organizations, it's purely just what are they producing in terms of ARR. But I think when you're in a more transactional business, the activity is really critical — understanding like how many meetings, because you'll know you have historical data to understand what good looks like for a rep that produces — they have this many meetings, at least this many opportunities, and those opportunities close at this rate, and therefore it generates this. And so that's really kind of the — if you just look at the rep funnel, if you will, of like, they are able to have five new prospect meetings a day or whatever it is — especially if they're selling to SMB, like, there are easy markers that you can put out there because it can become formulaic to an extent if you have a rep profile that's defined and you know what the activity levels need to be and so on and so forth.

Janis Zech: Yeah. Yeah. Okay. Great. Yeah. Maybe less, like, relevant for, like, the average board meeting, but then at least for middle management.

Sarabeth Scott: Operationally, definitely. Yes.

Janis Zech: Yeah. Great. Okay. I think we have one more question on the sales side.

Sarabeth Scott: Yes. And then this is actually applicable across the board. But are we growing and retaining customers? So that's your GRR and your NRR, which maybe some people wouldn't put into sales metrics, but it depends on if an AE is responsible for expansion, that obviously makes it very relevant, but I think it's relevant no matter what when you're talking about anything go to market related.

Janis Zech: It's so important. That should show up. Yeah. It's so critical. And then I think when you segment it by, you know, SMB, mid market enterprise, you often see some good surprises, right, because you might see that smaller companies at least most often churn more than larger companies. At least that's the typical pattern most companies see. Then obviously, NRR — I mean, I think it's just, right, it's really like probably the most beautiful thing in SaaS, right, like that you can actually just keep growing without adding anyone in theory. And so, obviously, you know, if you're above a hundred thirty, a hundred forty, that's just, like, really, really good. And it shows up in your valuations. All the investors deeply care about it.

Sarabeth Scott: One hundred percent. I mean, it's kinda become the metric of the last couple of years — NRR. Everyone is focused on land and expand, growing those existing relationships, because it's really hard to bring a new customer in. It takes, you know, depending on your business, but it's hard to acquire net new logos. And so the worst thing you can do is lose them or not grow them.

Janis Zech: Yeah. I think the last metric on CAC payback I heard was like somewhere between twenty eight to thirty two months. So meaning that you need twenty eight to thirty two months to recoup that investment of acquiring a customer, which is a very long time, and assumes that you basically don't churn them. So if you have a high NRR on those customers, then obviously you reduce that CAC payback quite significantly. But yeah, I think this CAC payback, GRR, NRR, obviously bookings versus plan — I think they all matter for different layers. If you think about marketing, right? Like, I think it's very nice to think about it in questions. What are the questions you think about?

Sarabeth Scott: So with marketing, it really comes down to three things in my view. Are we generating enough pipeline? And that's relevant whether it's a product led growth company or a sales led or a mix of both. And so in terms of that, you look at what are the qualified lead volumes — MQLs, PQLs, a lead velocity rate, which I think is a very fancy term for just looking at qualified lead trends month over month. Like, how many leads are we getting in month over month over month?

Janis Zech: I actually wanted to ask you what that metric is. I didn't know what that was.

Sarabeth Scott: Exactly. I was like, somebody said that to me and I was like, I literally was like, I hate to look that up. And then I was like, well, I kind of like the term, but I don't know that it's that widely used, but I know in every business I've been in, we report month over month lead volume trends. So there you go. And then just total marketing sourced pipeline. And I think, you know, that varies wildly in whatever product you are selling. Those rates will look very different. Okay. And then the second area is pipeline quality. So is the pipeline quality sufficient enough to meet our plan? As you know, this is usually the push and pull between marketing and sales. And so it really is — that is where you'd want to look at MQL and or PQL to SQO conversion and PQL to SQO. I know this may sound a little strange because it's a qualified lead that usually closes in self serve, but there are absolutely many cases where a PQL comes in and then they request sales to be involved. And so you want to make sure that those interactions are adding — when you get a salesperson involved that it's additive and those ASPs are higher. So in companies where you have both motions, PLG and sales led, you need to make sure you're looking at these metrics side by side. Total marketing sourced bookings, of course. So how did that pipeline convert into bookings? How many new paying customers do you have? And then what's your annual revenue per account — ARPA? Pretty standard stuff.

Janis Zech: Yeah. Yeah. Makes total sense. And like you said, I'm assuming, like, wildly fluctuating throughout the year.

Sarabeth Scott: Yes. Very very hard to get some consistency on. And also, okay, right, if you can explain it. I mean, it's always like — many of these things, some are like you would expect, like, a consistent sort of baseline. And then for others, I would assume you have peaks or spikes due to, like, campaigns.

Janis Zech: Yeah. I was just gonna say, but whatever your marketing calendar looks like will obviously influence a lot of this. But I think that's why there's also a lot of value in looking at, like, is there seasonality at play? So looking at prior years, you know, comparison to last year, things like that.

Sarabeth Scott: Yeah. Yeah. Certainly. And then also, like, with growth hacking in quotes, but like, you also sometimes have these, like, new motions that suddenly come up and then they're successful for half a year or a year and then less so again.

Janis Zech: Nice. Okay. One more, I think, on the marketing side.

Sarabeth Scott: The one more is, is marketing efficient? So then you're right back to your CAC and your CAC payback period and your LTV to CAC. So very standard in the marketing world, in my view.

Janis Zech: I have a general question. We talk about sales, we talk about marketing, we're gonna talk about customer success. Where do you see, like, the kind of outbound game? Is that part of sales? Is that part of marketing? Just curious how you think about it.

Sarabeth Scott: It depends on where your BDR or SDR team sits, if you have one. And I do think though it really does belong to be reported within whatever function it sits within, but I think it's relevant for both because marketing, whether it sits in the marketing organization or not, it obviously has a very strong role in supporting that motion. But it is the reps that are doing the outreach. And that to me falls under pipeline generation. So whenever you look at pipeline generation, you wanna understand what is the source of that pipeline generation. So that's the only — not the only one, but one of the only metrics I would really encourage — no matter what, look at the source of that pipeline generation every single time. And honestly, like, it's a big factor. We were talking about GRR and NRR and all these metrics. Like, it's a really good exercise to go through at least once or twice a year, certainly during planning, to look at what do all of these metrics actually look like across different industries, across different segments, and you'll very quickly be able to kind of use that as a proxy almost to get to an ICP. The number of times I've looked at, like, all of these metrics literally lined up across the different industries that we have been targeting and the times that we've been like, woah, we've been targeting this industry and not performing super well. So our retention rates are lower than industry. Our sales cycles are longer. Our ASPs are lower. Like, any one of those metrics that looks off, you need to dig in and understand why. Sorry, I took a major sidestep here, but I think it's relevant.

Janis Zech: Yeah. I think it makes total sense. Right? Like you said, I think all of the metrics that you just mentioned — we still have to cover customer success. But it always makes sense to look at it by geo, by industry, segment, segment, segment, whatever, however you slice and dice your revenue organization — this also, I guess, is how you should slice your KPIs that you report for the board because that's what it's for. Right? You wanna make strategic decisions for different parts of the organization. It feels almost like we're going to have to do one on ICP because I think this is something that is so hard. You have often so many different ICPs and then you think this, but then is it backed on real data? And how do you go about it? Right? And I think it basically touches so many aspects, but yeah, let's not do it today. Customer success.

Sarabeth Scott: That's too much. It's already really dense. Sorry, sorry, listeners. This is a dense episode, but I hope you love it. I certainly do. So yeah, customer success. What are the key questions there? First, are we retaining customers? So that's looking at your gross retention rate and then your logo retention. And that's important to have that distinction because someone could churn or not churn, but they could downgrade, but then they could add a different product and still maintain — and you could, you know, ostensibly — so anyway, the point is that those two things side by side will give you a really good picture of how many customers you are actually retaining. And then secondly is, are we growing those relationships? So what is your NRR? And then what is the expansion revenue rate? Or just what is your percentage of expansion bookings and or revenue as a percentage of your beginning ARR, MRR, whatever you're using? And then for any PLG led companies, is there self serve expansion? Meaning, are customers coming back and saying this is great, I need more. And then the third question is simply, are our customers healthy? So hopefully you have a health score of some sort. And so understanding what that health score distribution looks like — so if you look at your customer base and, you know, kind of if it's just to be super simple about it, red, yellow, green, or whatever those scores are for your business, looking at the number of customers that sit in each one of those is a good indication of how much risk or how well you're doing. And then of course, NPS. I'm a little mixed on how I feel about NPS, but I think it's one of those things that is just there and will forever be there.

Janis Zech: And so easy to hack.

Sarabeth Scott: It is easy to hack and usually it's like — you can put an NPS score up. And this happened in one of the businesses I was in — the board asked how many customers responded to give you that NPS score? And it was like a very small percentage of our total customer base.

Janis Zech: Then it's like — I've seen NPS implementations where basically the defining rules of triggering the survey were like no crash within the last sixty days, no submitted support tickets. Basically just tracking lots of things and only showing the NPS survey if you actually fall into that category, which —

Sarabeth Scott: Oh, are you serious?

Janis Zech: Yeah. I'm serious. I'm not gonna say who, obviously, but yeah, that's why I'm saying it's so easy to hack.

Sarabeth Scott: Gamed. Yeah. You can game it. So it's not just the number, right? It's like, tell us exactly how you implemented that NPS survey. What is the trigger?

Janis Zech: Yeah, yeah. Okay. No, this is great. I really like it. So just to recap, we covered three questions in customer success, three questions in marketing, five questions in sales. We'll put those questions into our show notes so you can copy and steal them from there, but I think that will help you in any board meeting in the future. And maybe one question from my end just because this is a RevOps Lab podcast — just your perspective, you know, what's the role of RevOps when it comes to all of these questions? How do you see the role of RevOps like helping to put these numbers together?

Sarabeth Scott: Yeah. I feel like RevOps is in a uniquely good position to, a, understand these metrics and recognize when there's red and green flags in them. And I think that the ability to take the metrics and put the context of the business around it — or vice versa, putting the context around those metrics — is, I don't know that there's another place in the organization where you can do that as well as you can from RevOps because you understand all of the back end, the process, what goes into it, how things should be working, what campaigns are running — like you inherently know all the things that are happening to support the go to market functions at any given time. And so having all of that contextual knowledge — I think sometimes I remember the first time I was like, I actually know a lot more just from talking to reps. That's one of the biggest things. Like, you gotta talk to people in the field, but also, like, you understand what's happening. You have an engagement with sales leaders, with sales reps, with, you know, customer success managers. RevOps works with all of these people every day. And so having that color commentary around the numbers helps support or bring to life a narrative that maybe other leaders in the organization don't necessarily have.

Janis Zech: Yeah. Yeah. I mean, maybe just a comment to add. So, right, like, getting to those metrics and being able to actually track them properly and report on them accurately is also not easy. Just not easy. You have to get to that, and then you have to get to the ability to segment. Because if you can't do that, that's almost like a superpower. Because you can go to your CEO, you can go to your CRO and say, hey, look, I analyzed our mid market business and I realize that in this industry, we're spending that much for a customer and we actually spend that much for a customer in a different segment. Shouldn't we redirect marketing dollars that way or pipe gen dollars that way? I think coming up with these strategic insights that realistically the others won't see is really a superpower that can help you grow your career faster and get a seat at the table.

Sarabeth Scott: One hundred percent. And of course, all of that is predicated on the fact that RevOps needs to construct a tech stack and a system and a data structure. The data infrastructure is so critical, and you're hearing a lot of people talk about that now as people want to infuse AI. Like, if your data structure is not sound, you will not gain anything from any of those tools. And so that's thing number one, is making sure that the systems and the process are set up in a way that — there's a data structure behind all that that supports getting to these metrics cleanly and easily and accurately. So that's thing one. And then the second part of that, to your point on the superpowers, is having that contextual knowledge to then bring that to life and see the opportunities that live in that data.

Janis Zech: Love it. Okay. Wise words. Thank you. I think this is a great place to end. As you know, we always ask one final question at the end. What is the — as you know, since thirty five minutes ago — yeah, the question is always like, what is the recommendation for a book or like a show or like a podcast that you would make for our audience?

Sarabeth Scott: Yeah. I have been really into Cliff Simon — he just launched his Lodestar business or Polaris apps, but he's got a newsletter called the Lodestar, and I read it every time it comes out. And I've watched a number of his podcasts. He's got some really great folks on there. So I love his voice. I love his viewpoint and his vantage point on a lot of things with RevOps. And so he's always been a voice that I've appreciated, and I'm really enjoying his new content. So there you go.

Janis Zech: Awesome. We should get him on the show. We actually had him on the show.

Sarabeth Scott: Oh,