GTM Live – Episode 30: The Complete Go-To-Market KPI Stack

Podcast: GTM Live
Hosts: Carolyn Dilks & Trevor Gibson (Passetto)
Date: September 10, 2024
Summary By: [Your Expert Podcast Summarizer]

Episode Overview

This episode is a comprehensive, practical walkthrough of the modern Go-To-Market (GTM) KPI Stack for B2B SaaS, targeting CEOs, CFOs, and revenue leaders frustrated with outdated GTM measurement. The hosts take a realistic (albeit fictional) SaaS company and demonstrate, step by step, how to dissect the numbers, identify bottlenecks, and align leadership priorities using robust, actionable KPIs. The discussion emphasizes efficiency, unit economics, and sustainable growth over vanity metrics, and includes questions from a highly engaged revenue leadership audience.

Key Discussion Points & Insights

1. State of Play for SaaS Through Year-End (00:17–02:45)

• September marks a pivotal ramp-up after summer slowdowns—planning and major decisions are now made leading into 2025.
• “There is a lot of momentum that starts today through the end of the year that'll power you into 2025.” (B, 00:30)

2. Intro to the KPI Stack – Breaking Down the Hierarchy (02:46–04:59)

• Overview of the KPI stack: From high-level investor metrics (e.g., revenue multiples, Go-to-Market [GTM] efficiency) broken down to granular, actionable team and system-level measurements.
• “It starts with what the company cares about most and methodically breaks those down all the way into actionable insights.” (B, 03:20)

3. Practical Walkthrough: Diagnosing a SaaS Company’s GTM Performance (05:00–14:30)

a. Top-Level Metrics & Their Impact

• Company profile: $86M ARR, 17% growth (slowing), middle of private equity hold.
• GTM Efficiency has ballooned from 180% (good) to 375% (critical/red zone). Target should be ~175%. Lower is better.
• High GTM efficiency = too much spend for the revenue produced; this erodes company valuation.
• “If this number [GTM efficiency] was methodically taken down from 375% to 175% while maintaining growth... this company could be worth somewhere between 8 and 12x revenue.” (B, 04:15)

b. ARR Waterfall Analysis

• Net New ARR: $12.8M, with expansion and new logo failing to offset contraction and churn; Net Revenue Retention (NRR) is less than 100%.
  • “When NRR is less than 100% it means that their post-sale ROI is negative.” (B, 06:00)
• Post-sale investment ($10M/yr) yields negative incremental ARR—clear churn/retention issue.

c. Deeper GTM Breakdown

• New Logo CAC (Customer Acquisition Cost) Payback stands at over 2 years (suboptimal), and expansion efforts are returning less than invested.
• Sales win rates declining (from 18% to 10% over two years)—this creates pressure for more pipeline, usually of lower quality.

d. Key Strategic Insights

• The root issues:
  • Weak net retention (NRR < 100%)
  • Declining sales win rates
  • Poor pipeline creation ROI
• “We need to put together a strategic plan on how we’re going to improve NRR methodically over the next 12 to 24 months.” (B, 09:50)
• Unified view: No attribution squabbling; executive alignment on a single KPI set.

e. Connect to the ‘Revenue Breakpoints’ Framework

• At $86M ARR, company is at a sustainability/cost breakpoint—cannot grow efficiently until GTM efficiency is normalized.

4. Audience Q&A – Expanding the Framework (14:42–47:10)

a. The Rise of GTM Efficiency as a Core Metric (15:07–18:28)

Q: "How long have you championed GTM efficiency, and what did companies use before?"
A: Since 2016–17. Old metric: CAC payback period, but that only captures new logo cost, not post-sale (where real SaaS value accrues). GTM efficiency unifies new logo and expansion, offering a superior measure.

• “CAC Payback Period only really looks at the cost to acquire a customer... doesn’t take into account the post-sale process where all the recurring revenue is actually captured and generated.” (B, 15:44)
• Official partnership announced: Passetto & Winning by Design.

b. Calculating and Laddering GTM Efficiency (19:51–21:26)

• Step-by-step formula:
  1. Total GTM expenses / Net new ARR (new logo + expansion – churn – contraction)
  2. Break down expenses & returns for new logo and expansion separately.
  3. Negative net ARR on expansion = negative ROI/infinite GTM efficiency.

c. Accountability: Who Owns What in GTM Structure? (21:33–23:42)

• Roles split into acquisition (sales), expansion (account management, CS), and retention (post-sale).
• CMO’s marketing investment should span customer lifecycle, not just pipeline creation.
• “The structure was created during the growth at all cost era... and it just doesn't make sense [today].” (B, 23:17)

d. Leadership Buy-In & Board Alignment (23:42–26:46)

Q: "How to get leadership to adopt GTM efficiency—even with budget cuts and high growth targets?"

• Unit economics always matter but become critical at scale (10–100M ARR).
• Show executives outside data: strong GTM efficiency correlates with 3x higher valuations.
• “For our $100 million company, that would make a difference of $700 million.” (B, 25:32)

e. GTM Spend Lag: Accounting for Marketing Time-Horizons (26:57–29:42)

• For established (50M+) companies, calculate trailing 12mo metrics; minimize the impact of spend/revenue time lags over quarters.
• “If I'm the CEO or the CFO, I'm not pumped to have my marketing team spend $10 million that I might get a return on 24 months from now. Fuck that.” (B, 28:20)
• Mature marketing should produce pipeline in period.

f. Balancing Experiments vs. Accountability (30:01–31:55)

• Only add spend if existing investments deliver consistently high ROI. Otherwise, reallocate, don’t inflate.
• Keep experiments a small % of total budget; scale only after results are proven.

g. Marketing ROI & Quarterly Allocation Review (31:59–36:21)

• Reallocation is a quarterly discipline—double down on what's performing, cut or rework what isn’t.
• Example: If Google Ads are delivering $2.50 revenue per $1 spent, scale up. If not, reallocate.

h. Adapting to the End of “Growth at All Costs” Era (36:22–40:08)

• Many leaders lack efficiency rigor because historic models (2011–2022) prized raw growth over unit economics.
• Cost inflation (salaries, ad costs) now renders old segmentation and buying models unprofitable.
• “The models... are built for the growth at all costs era. Not to deliver profitable, efficient, or sustainable growth.” (B, 39:32)

i. Data Collection & Implementation Speed (40:20–41:54)

Q: "How fast can you deliver the KPI stack for a company?"

• Target: Less than 2 weeks, pushing to achieve in 48 hours if data is ready.
• “I think it would be a no-brainer to buy this, and I think it would be a no-brainer to buy it minimum every quarter.” (B, 41:14)

j. Google Ads: Why Does Inefficient Spend Persist? (41:55–45:56)

• Investors often push for “growth at all costs,” delaying accountability for efficiency until late-stage.
• Finance/C-suite often lacks tools or insights to challenge marketing “influence” metrics—so waste persists.
• “Influenced revenue reporting is incredibly dangerous, which is why we need these top level KPIs to be able to flag big things…” (B, 44:48)

Notable Quotes & Memorable Moments

• “Recurring revenue is a result of recurring impact.” (B, 15:20)
• “If you run out the model and say ‘We’re just going to continue this thing for the next three years’… eventually they’ll need to spend more money on go to market than the company gets in revenue.” (B, 12:28)
• “All the reporting is not around ‘How do we solve this business problem and get this metric on track?’ All the reporting is around ‘Look at how good our department did.’” (B, 45:38)
• “If executives knew this was available and they could get this in 48 hours... it would be a no-brainer.” (B, 41:18)

Key Timestamps & Segment Landmarks

| Timestamp | Segment | |---------------|------------------------------------------------------------------| | 00:17 – 04:59 | Setting the context & KPI stack overview | | 05:00 – 14:30 | Practical example: full diagnostic walk-through of a SaaS co. | | 15:07 – 18:28 | History & rationale for GTM efficiency as the primary metric | | 19:51 – 21:26 | Calculating GTM efficiency per segment (new logo vs. expansion) | | 23:42 – 26:46 | Aligning leadership/board, when to prioritize efficiency | | 27:26 – 29:56 | Marketing spend lag: immediate results vs. long-term bets | | 30:25 – 31:55 | Balancing program experiments and ROI | | 32:46 – 36:21 | Quarterly reallocation and data-driven marketing resource allocation | | 36:52 – 40:08 | Changing from 'growth at all costs' to efficient GTM | | 40:57 – 41:54 | Implementation: How fast can the KPI stack be delivered? | | 41:55 – 45:56 | Why does wasteful Google Ad spend persist? |

Tone and Language

• Direct, practical, and sometimes blunt when confronting outdated processes: “Fuck that.” (B, 28:20)
• Very data-driven, but patient in outlining formulas, methodology, and real-world implications.
• A spirit of “no blame, no vanity--just improvement” points the way toward cross-functional collaboration and transparency.

Summary Takeaways

• Modern Metrics Matter: The old focus on CAC payback and source-based granular attribution is outdated. Efficient growth requires a unified, end-to-end view—GTM efficiency, with consistent measurement and cross-functional alignment.
• Performance Diagnosis Is Fast and Actionable: With the right approach, a full GTM diagnostic can point to the biggest levers for value creation in as little as days.
• Leadership Must Adapt: The “growth at all costs” era is over; unit economics, not just top-line growth, now drive multiples and valuations.
• Quarterly Realignment/Resource Allocation: Treat marketing budget like an investment portfolio—review, reallocate, and double down on ROI-positive programs continuously.
• Marketing Must Drive Pipe In-Period: No more excuses for long-tail, unaccountable marketing spend; accountability is now and every quarter.

For Revenue, Finance, and Growth Leaders:
This episode is essential listening (and now summarized reading) to arm yourself with a practical, reproducible framework for diagnosing, aligning, and leading GTM toward sustainable, efficient growth in today’s B2B SaaS environment.