GTM Live – Episode 28: Revenue Planning and KPIs for 2025 (RV208)
Date: August 27, 2024
Host: Passetto (Carolyn Dilks & Trevor Gibson)
Special Guest: Chris Walker
Podcast Theme: Go-to-market (GTM) planning, revenue KPIs, and executive-level alignment for B2B SaaS companies in 2025.
Episode Overview
This episode is dedicated to a deep-dive on revenue planning and selecting the right KPIs for B2B SaaS companies as they prepare for 2025. The hosts and guest Chris Walker challenge the traditional GTM attribution-based planning model, advocating instead for simplified, objective, unit-economic-driven metrics and executive-level KPI cascades. The panel also fields audience questions on segmentation, pricing transparency, cost allocation, efficiency metrics, and actionable strategies for current market challenges.
Key Discussion Points & Insights
1. The Case Against Attribution-Based Planning
- Context: Companies are beginning budget and strategic planning for 2025, typically using a mix of attribution and KPIs.
- Chris Walker’s Argument: Attribution unduly complicates forecasting, creates siloed targets, and distracts from what actually matters.
- Quote: "Attribution is not going to tell you how fast an opportunity converts from a meeting into a qualified opportunity... These are all core KPIs... that have nothing to do with attribution." (09:00)
- Recommendation: Strip attribution out of KPIs. Instead, focus on unified GTM production metrics: total pipeline, win rates, CAC, efficiency, and renewal/expansion rates.
2. The Role of KPIs in Planning & Executive Alignment
- Process:
- Step 1: Calculate and track core GTM/revenue KPIs at the executive level. Observe historical trends without changing anything yet.
- Step 2: After a few quarters, integrate KPIs into annual/quarterly planning.
- Step 3: Align senior leader goals/incentives with these KPIs.
- Step 4: Consider if director-level visibility is needed, or if translation of high-level metrics should remain at the VP/exec layer.
- Quote: "The KPI should tell you how you're doing, not attribution." (10:10)
- Further Emphasis: Separate KPIs for performance (e.g., pipeline growth, win rates) and for unit-economics (e.g., CAC, cost per new ARR dollar).
3. What Are the “Right” KPIs?
- Investor/Financial Layer: Net-new ARR, ARR growth rate, CAC payback, Rule of 40, free cash flow.
- Operational Layer: Metrics that break down high-level results to actionable production line insights (e.g., pipeline unit economics, gross revenue retention—GRR).
- Chris elaborates on the need for a robust, connected data model across financial systems and CRM to enable this analysis.
4. Pricing Transparency for B2B SaaS
- Listener Question: Why isn’t published pricing common for SaaS, and how to convince executives to adopt it?
- Walker’s Take: It’s about confidence in the offer and internal fear, not logic.
- Quote: "If you have confidence in your product and confidence in the ROI that you deliver against that offer, it's very easy to put your price on the website..." (18:18)
- Examples: Even Passetto hasn’t published pricing yet due to ongoing development, but for companies above $10M ARR, Walker insists there’s “no excuse not to.”
5. Segmentation and Production Line Modeling
- Classic Segmentation: Enterprise, mid-market, SMB, micro-SMB.
- Key Point: Segmentation should be driven by real differences in unit economics and required GTM motion. If the same production motion is used for different segments with only slight ACV differences, it may be false segmentation.
- Quote: "The motion you run to close a 4K customer fundamentally has to be different than the one you use to close a 40k customer..." (25:55)
- Ideal Segment Gaps: Customer value should be 3-10x higher between meaningful segments, otherwise you’re just “fake segmenting.”
6. Sales & Marketing Efficiency: Metrics & Timelines
- Core Formula:
Sales & Marketing Efficiency (%) = Total GTM spend / Incremental ARR × 100- Where incremental ARR = new logo + expansion – churn – contraction
- Efficiency Targets:
- 2012 “ideal” was 100%
- 2021 SaaS public median was 140%
- 2024 SaaS public median is 225–250%. If above 200% for 6 quarters: business is "unsustainable".
- Improvement Timelines:
- Incremental improvements (e.g., 220% → 180%) possible within 4 quarters
- Transformational change (e.g., 400% → 200%) requires cost-cutting and may take 4–6 quarters
- Quote: "If your sales and marketing efficiency is 400%, there's no fucking way that you can spend more money." (32:11)
- Cost Inclusion: All headcount and programs used for new logos, account management, customer success, tools, events, etc., but not COGS, legal, product development, or G&A.
7. Private vs Public SaaS Efficiency Problems
- Observation: Private SaaS companies tend to have even worse efficiency metrics than public ones, due to years of "growth at all costs," easy funding, and ignoring unit economics.
- Quote: "A lot of private companies...skipped the unit economic step...Now they're in this stage where literally they can't IPO, they can't raise another round, they're burning a ton of money..." (41:00)
Memorable Quotes & Notable Moments
- On Attribution’s Limitations:
"At the highest level... it doesn't matter whether the SDR booked the meeting from third-party data, or the person came in from a content download... What matters is that we got it and that account is in pipeline." (08:30) - On Cost-Cutting Reality:
"If we were the owner of the business and our company was spending $4 in sales and marketing to get a dollar in business... you would cut costs too." (34:50) - On Pricing Transparency Indiead:
"The facts don't matter. If the facts mattered, then people would do it... The logical reason is that you should at least be able to put a starting point or a range or... your exact pricing model." (20:00) - On Internal KPI Communication:
"The recommendation...is: step one — get the KPIs measured and be aware of them at the executive level and understand the historical trends. Just don't change anything about anything..." (12:31) - Segment vs. Fake Segment Realization:
"The differences in customer value should be 3 to 10x higher between segments... If your S&B customer is 20, your mid-market customer should be at least 60..." (28:50)
Important Timestamps
- 00:17: Housekeeping, new Passetto event links; upcoming guest schedule
- 07:20: Introduction: The fallacy of attribution-driven GTM planning
- 12:09: How should companies roll out KPI-driven planning?
- 14:21: Essential GTM/revenue KPIs & metric stack discussion
- 17:31: Pricing transparency in SaaS: why most don’t do it
- 21:56: How and when to bring segmentation into planning
- 25:55: Diagnosing fake segments and aligning production motions
- 30:57: Measuring GTM efficiency, cost allocation, improvement timelines
- 36:46: What's included in “go to market spent”, public/private benchmark rates
- 42:11: Why private SaaS companies have worse efficiency than public
- 43:00: Wrap-up and preview of next week’s “production lines” content
Flow & Tone
The conversation is direct, analytical, and pragmatic—mirroring the no-fluff promise of GTM Live. Chris Walker is candid (“...there’s no fucking way that you can spend more money...”), passionate about simplifying and unifying how companies should view GTM performance, and focused on actionable recommendations without sugarcoating realities. There’s a natural cadence between strategic, high-level insights and granular, practical advice.
Conclusion
This episode provides essential insights for SaaS CEOs, CFOs, and revenue leaders navigating 2025 planning. The clear verdict: focus relentlessly on unified revenue KPIs and unit economics, resist the outdated lure of attribution-driven planning, and make bold structural changes to cost and segmentation before it’s too late. The episode closes with a promise of deeper dives into the “factory” concept and a special upcoming session with Jocko Vanderkoy.
For continued learning:
- Register for the September 10th event with Jocko Vanderkoy (Passetto Events)
- Next episode will go deeper into GTM production lines and growth modeling