The Go-to-Market

Reporting Guide
Key metrics and frameworks for GTM organizations to track
and leverage, including templates for best-in-class reporting

Go-to-Market Series
December 2023

Copyright © 2023 ICONIQ Capital, LLC. All Rights Reserved.

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2
The Authors
Seeking to empower our portfolio with proprietary analytics,
insights, and advisory across business operations and strategy

Christine Edmonds Claire Davis

Head of Portfolio Analytics Portfolio Analytics

Vivian Guo Sam O’Neill

Portfolio Analytics Portfolio Data Manager

Addison Anders Ani Reddy

Portfolio Analytics Portfolio Data Analyst

3
Introduction
About The Research
ICONIQ Growth has invested in more than 100 SaaS, fintech, and consumer tech
companies. We believe a persistent theme across many successful technology
companies is that a holistic and well-executed go-to-market strategy is one of the
key pillars that drives sustainable, long-term growth.

In the ICONIQ Growth Go-to-Market Series, we use organizational data and

industry perspectives to provide detailed answers to the key go-to-market questions
we receive from B2B SaaS leaders. We examine myriad topics across go-to-market
compensation, incentives, organizational structure, roles and responsibilities,
reporting, forecasting, and enablement, to share best practices and proprietary
benchmarks that help leaders scale their organizations.
A critical component of any strong go-to-market strategy is a company’s ability to
understand what works, scale this effectively, and work towards revenue
predictability – and this requires data-driven reporting.

Explore more ICONIQ Growth research:

4
 What’s included?
Part I: GTM Reporting Best Practices
Best practices for designing and operationalizing a B2B SaaS GTM reporting engine based on
learnings and perspectives from the ICONIQ Growth portfolio and network.1

Part II: The Go-to-Market Metrics Guide

Includes definitions, calculations, and frameworks for key metrics, and best practices for
operationalizing the go-to-market organization. Throughout this guide, preferred formulas for
B2B SaaS businesses are included; however, there are multiple ways to calculate various KPIs and
other methods may be more relevant for different business models and sales motions.

Companion templates
ICONIQ Growth templates that can be leveraged to track and report on these metrics, and
illustrative examples of best-in-class reporting:

GTM Board Slides “Must-have” go-to-market board deck slides

ARR & Logo Funnel ARR and logo funnel templates and charts

Pipeline, Leads & Top of Funnel Pipeline outlook and coverage by segment

Who’s this for?

This resource is made primarily for B2B SaaS companies with some component of a sales-led
motion. However, most of the metrics, frameworks, best practices, and templates included
are widely applicable across technology business models and go-to-market motions. The
metrics, frameworks, and templates in this guide will be most useful to a CEO and heads of
revenue, marketing, customer success, and finance teams.

How do I use it?

This guide is meant to help companies of all sizes in building out their GTM reporting
motion. The templates included can be leveraged for internal reporting and the frameworks
and best practices can help go-to-market organizations refine and perfect their revenue
operations.
Introduction

1 See more about these perspectives on the following page. For a complete list of ICONIQ Growth portfolio companies,
please see the appendix 5
 Industry perspectives
Throughout this guide, we also weave in perspectives, insights, and best practices
from go-to-market executives in the ICONIQ Growth B2B SaaS portfolio and
network. All industry perspectives have been anonymized to protect company-level
information.

Perspectives were gathered via interviews with the following collaborators:

Shannon Hughes Johanie Marcoux Angie Holt

VP, Corporate Marketing Sr Director, Marketing SVP, Customer Success
Strategy

Adam Aarons Conor Nolen Sydney Sloan

Chief Revenue Officer Chief Customer Officer Chief Marketing Officer

Cindy Chow Ken Sims Stephen Hallowell

Head, B2B Marketing Chief Revenue Officer VP, Strategic Services

Ben Saitz Rebeca Tristan Sam Yang

Chief Customer Officer Head of Customer President, Field Operations
Experience & Operations

Brad Lochman Peter Kim Jack Montgomery

Chief Sales Officer Chief Sales Officer CFO, Head of Sales &
Marketing

And from go-to-market and finance leaders at the following companies:

Introduction

Trademarks are the property of their respective owners. None of the companies illustrated have endorsed or recommended the services of ICONIQ. Not all
companies on this page are ICONIQ Growth portfolio companies. For a complete list of ICONIQ Growth portfolio companies, please see the appendix. Insights
from some but not all ICONIQ Growth portfolio companies as well as companies not part of ICONIQ Growth’s portfolio. 6
 Related materials
This guide is one in a series of ICONIQ Growth go-to-market reports.
Benchmarks for many of the KPIs and metrics included in this guide are displayed
in these materials and other ICONIQ Growth content, which will be linked
throughout this report whenever relevant.

Access the full Go-to-Market Series

Compensation & Incentives PUBLISHED UPCOMING

Sales Marketing Customer Success Interactive

Compensation Compensation Compensation Dashboard
Portfolio Only

Blog Post Blog Post

Re-designing sales Account executive
incentives in 2023 compensation 101

Team, Org Structure & Responsibilities

Building Go-to- Hiring a Head of Hiring a Head of Interactive

Market Teams Sales Marketing Dashboard
Portfolio Only

Operationalizing Go-to-Market
Templates:

The GTM The GTM GTM Board Slides

Reporting Guide Tech Stack
ARR Funnel

Pipeline & Leads

Introduction

Blog Post
Blog Post
Segmenting the
Marketing budgets
sales org

7
 PART 1

GTM Reporting Best Practices

The Metric Map
A framework for organizing a company’s universe of data
p9

Displaying Longitudinal Data

The best ways to show monthly or quarterly trends
p10

Reporting Should Reflect Scale

Key questions will change as an organization grows
p11

Essential GTM Board Deck Slides

Updates & metrics that should be included in board materials at any scale
p12
00
01
02
The ICONIQ Growth GTM Scorecard
The 6 key metrics for any GTM organization
03 p13
04
05 Click here to skip to Part 2: The GTM Metrics Guide
06
8
 GTM Reporting Best Practices
The Metric Map
We believe designing a metric map is one of the most important steps to achieving
reporting excellence in the go-to-market organization. A metric map is a framework
for organizing a company’s universe of data. Identify all the key metrics the go-to-
market teams should track, who those metrics should be accessible to, and how
often these metrics are reviewed by or shared with that audience.
Here’s an example of a metric map framework for a GTM organization:

Audience Description Metrics shared

Select examples
The universe of metrics tracked at a
Shared more often
Internal stakeholders

All the information a company or

company, including:
team leader regularly review or have
• Employee performance,
access to. This often includes
engagement, compensation
Leadership employee-level information that
• Funnel metrics such as
would be shared with the relevant
pipeline, conversion rates, ACV
employee, but would not be shared
• Customer health & retention
with a broader audience
metrics

Information typically shared with • Sales performance: quota

employees in a team or group setting. attainment, pipeline coverage,
Some of this information, such as progress towards ramp
Team employee performance, would not • Funnel metrics such as
normally be shared with a broader pipeline, conversion rates, #
audience. activities

• Unit economics & efficiency

Information typically shared during
Board of board of director meetings. Of course,
•
•
Sales rep performance
Growth, attainment vs. plan
Directors additional information can be shared
upon request
• Customer health & retention
• Budget, forecast, hiring plan
GTM Reporting Best Practices

• Growth, attainment vs. plan

Information typically shared with the
Company- entire employee base in settings such
•
•
Customer health & retention
Pipeline & forecast
wide as an all-hands meeting or company-
wide report
• Funnel metrics such as
pipeline, conversion rates, ACV
External stakeholders

Based on shareholders rights – e.g.,

Shared less often

Information that would be share with

Shareholders company shareholders
annual financial statements, select
GTM KPIs
Based on SEC guidelines – e.g.,
For a public company, information
Public that would be shared in public filings
quarterly and annual financial
statements with select GTM KPIs1

1 See SaaS key metrics disclosed upon IPO and ongoing after IPO in the ICONIQ Analytics Path to IPO report 9
 GTM Reporting Best Practices
Displaying Longitudinal Data
Many of the benchmarks linked and referenced in this guide are presented as
median, average, or top quartile by ARR scale or sector. We share these to
demonstrate how performance evolves as companies grow and how goals may differ
by stage and business model.

However, for internal reporting purposes, we believe the best practice is to analyze
and share most of this data in a longitudinal manner (weekly, monthly, or quarterly
based on the reporting cycle) to identify and understand trends over time.

Longitudinal data is best shared in either chart or table format:

Use a chart when:

Ending ARR by Quarter
Visualizing a small Example Longitudinal Chart

number of longitudinal $90M

variables (1 to 3) or $65M

when comparing trends $45M

$30M
across a small number $15M $20M
$5M $10M
of variables (e.g., trends
by segment) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023

Use a table when:

Visualizing a larger
GTM Reporting Best Practices

number of longitudinal
variables (3+) such as a
complete ARR funnel,
headcount breakdown,
or pipeline integrity
analysis

All data shown is illustrative and randomized (not a benchmark for best in class) 10
 GTM Reporting Best Practices
Reporting Should Reflect Scale
We believe investing in the operational infrastructure to support reporting rigor is
important at all stages. However, companies face different challenges as they scale,
and reporting should reflect this by placing emphasis on different types of key
questions and corresponding metrics at different stages of growth.
Below summarizes guidance for the types of key questions we typically emphasize
at different stages of growth. While all these questions and metrics are important
throughout the company lifecycle, some may deserve particular focus at a certain
scale:

Stage Emphasized Questions Relevant Metrics

Examples (not exhaustive)

Early Stage Emphasis is primarily on:

• What are our signals of product market fit?
Lead & activity volume
Qualified pipeline & key deals
Finding product Conversion rates
• How is our ideal customer profile evolving?
market fit and New logo velocity
• What is our addressable market?
establishing GTM Net dollar retention
• What are we learning from customers?
building blocks Gross dollar retention
• What does our sales process look like?
• What should our top of funnel look like to Churn & lost reasons
achieve our growth goals?

Early Start putting more emphasis on:

• What do our unit economics look like?
All metrics in previous stage, plus:
Customer acquisition cost
Growth • How is our sales team performing? Payback period
• Are we measuring marketing impact? Gross margin
Stage • How effective are demand generation efforts? Magic number
Scaling the • Are we retaining and expanding customers? ACV
go-to-market • How is our pipeline health and integrity? Rep attainment
motion • What is our revenue risk? Inbound vs. outbound funnel
Cohort retention
GTM Reporting Best Practices

Expansion velocity
Customer concentration

Growth Start putting more emphasis on:

• What does our market penetration look like?
All metrics in previous stage, plus:
Competitive analysis
stage • What are our new/upcoming growth Forecast accuracy & attainment
Operationalizing opportunities and levers? Bookings vs. realized revenue
GTM towards • What is our marketing ROI by channel? Marketing channel ROI
repeatability and • What does our fiscal maturity look like? Rep activity & productivity (opptys
predictability • Are we approaching revenue predictability? per rep, qualified pipeline per rep,
• Is sales scaling efficiently and productively? win rate per rep, NNARR per S&M
FTE)

11
 GTM Reporting Best Practices
Essential GTM Board Slides
Regardless of scale, there are some updates and metrics that we believe should
typically be included in the go-to-market section of a board deck, if relevant to a
company’s business model.

Download the ICONIQ Growth GTM Board Slides Template

Key deals landed, churn

Update on north star Won/Lost
GTM Scorecard & lost diagnostics,
and other key GTM KPIs Analysis competitive dynamics

Summary of ICP Pipeline, weighted

Ideal Customer Pipeline
definition, criteria, and pipeline, and coverage
Profile relevant updates
Summary by segment vs. goal

Longitudinal view of all The efficacy of various

Pipeline
ARR Funnel components of the ARR pipeline generators and
Generation sources over time
funnel

Leads volume and

Longitudinal view of the Leads & Funnel
Logo Funnel conversion rates by
customer funnel Conversion source and channel

Early-stage
Sales rep capacity &
New Logo New logo velocity vs. Sales Capacity
productivity vs. targets,
Velocity goal as a signal of & Attainment ramp and attainment
product market fit
GTM Reporting Best Practices

Sales Early-stage
Net and gross revenue
Revenue & Longitudinal view of
retention and logo Productivity
Logo Retention retention by segment
individual productivity,
Ramp attainment, and ramp

Team Update & Early-stage

Cohort analysis of net
Cohort Longitudinal view of
dollar and logo Headcount
Retention retention over time
Quota-carrying reps, ramp
Planning rate, and hiring plan

This template is a resource to guide users’ reporting. The template and/or portions thereof may not be relevant for all companies 12
 GTM Reporting Best Practices
The ICONIQ Growth GTM Scorecard
There are seemingly endless metrics to track in a go-to-market organization and
unlimited ways to cut this data. However, we believe a critical signal of best-in-class
reporting is a company’s ability to identify top key performance indicators, set goals
against these KPIs, and regularly share progress against these goals.

We recommend including the ICONIQ Growth GTM Scorecard in board updates,

with quarterly and annual details on actuals, plan, and progress vs. plan.

Illustrative example with randomized data1:

PRIOR QTR THIS QTR NEXT QTR YEAR

In $M unless otherwise specified ACTUAL PLAN DELTA ACTUAL PLAN DELTA FCAST PLAN DELTA FCAST PLAN DELTA

Ending ARR 10.5 10.3 2% 14.1 15.0 (6%) 18.9 $20.0 (6%) 18.9 $20.0 (6%)
BOP ARR + net new ARR

Net New ARR 2.2 2.0 10% 3.6 4.7 (23%) 4.8 5.0 (4%) 11.0 $12.1 (9%)
Gross New ARR - Churned ARR

YoY ARR Growth 115% 110% 5 ppts 95% 105%

10
90% 93% 3 ppts 97% 103% 6 ppts
(EOP ARR - prior year EOP ARR) / prior year EOP ppts
ARR

Net Dollar Retention 120% 115% 5 ppts 120% 115% 5 ppts 115% 115% O ppts 119% 115% 4 ppts
[(Qtr expansion ARR - qtr churned
ARR(*4]/average(BOP ARR + EOP ARR) + 1

Net Magic Number 0.5x 0.8x (38%) 0.4x 0.9x (56%) 0.8x 1.0x (20%) 0.6x 1.0x (40%)
Qtr net new ARR / prior quarter S&M OpEx

Net New ARR per

GTM Reporting Best Practices

$125K $140K (11%) $135K $150K (10%) $150K $155K (3%) $140K $151K (7%)
S&M FTE
Annualized net new ARR / average S&M FTEs

LTV:CAC Ratio 2.9x 3.5x (17%) 3.1x 4.0x (23%) 3.5x 4.5x (22%) 3.2x 4.1x (22%)
LTV / CAC

When referencing metrics in board materials, it is recommended to include

formulas. There are various ways to calculate key metrics and understanding
methodology is important.

1 The GTM scorecard is illustrative and not a proxy for independent management decisions (not a benchmark for best in class) 13
 PART 2
The GTM Metrics Guide
01 Growth Drivers 04 Efficiency & Economics
Revenue recognition Gross margins
The ARR funnel Gross & net magic number
Growth Rate Customer acquisition cost (CAC)
New logo velocity Customer lifetime value (LTV)
Expansion velocity Payback period
Net new velocity
Revenue recognition FAQs

02 Sales Funnel 05 Team & Productivity

Stages of the sales cycle S&M OpEx per S&M FTE
Opportunity stages Headcount ratios
Pipeline & pipeline coverage Sales attrition
Conversion rates NNARR per S&M FTE
Deal size Sales capacity
Forecast vs. goal Rep productivity
Lead & opportunity sources Quota attainment
Pipeline FAQs Ramp rate

00 03 Retention 06 Fiscal Maturity

Forecasting methodologies
01 Net & gross dollar retention
Logo retention Attainment vs. plan
02 Cohort retention The “beat and raise” motion
Churn & lost reasons
03
Product usage & adoption metrics
04 Customer health metrics

05
06 Click here to return to Part 1: GTM Reporting Best Practices
14
 01 Growth Drivers
Key Questions + Metrics

Key questions Metrics Page #

to understand to track1

What does my revenue cycle Bookings p16-19

look like? Billings
Annual, total contract value
Recurring revenue (ARR, MRR,
CARR)
Revenue vs. deferred revenue
What does my recurring Beginning ARR p17-18
revenue funnel look like? Gross new ARR
Expansion vs. new logo ARR
Churned ARR
Net new ARR
Ending ARR

How quickly and ARR growth p20

consistently is ARR growing? New logo velocity
Expansion velocity
Net new velocity

What’s driving ARR growth? Subscription vs. services p21

New logo vs. expansion
Revenue by segment, geography,
channel, product, etc.
00
01 How well is ARR being Net dollar retention See section 03:
Gross dollar retention Retention
02 retained?
Downsell vs. logo churn
03 Cohort retention
Logo retention
04
05
06
1 Annual recurring revenue (ARR) is used as an example, but companies can also use monthly (MRR) or contracted (CARR) ARR 15
 What does my revenue cycle look like?
Revenue Recognition
Fiscally mature SaaS companies typically track all revenue types applicable to their
business so they can better predict revenue and minimize discrepancies or lags
between bookings and realized revenue.

Example: A contract with a 3-year term where $600K is due year one (including an implementation fee of
$100K), $1.2M is due year two, and $1.2M is due year three. Contract is signed on January 1, with a term
start date of March 1. Customer will be invoiced annually with payment due upfront.

Term Definition Example

Total dollar value from any customer
Bookings on Jan 1 = $3M
agreements to spend money with an
Bookings organization, usually the sum of all fees
Bookings are synonymous with total
(subscription + services) for the duration of
contract value (TCV)
a contract.
The amount of money invoiced to a
Billings on Mar 1 year 1 = $600K
customer that is due for payment. Most
Billings often, customers are invoiced once annually
Billings on Mar 1 year 2 = $1.2M
Billings on Mar 1 year 3 = $1.2M
or monthly according to the contract terms.
The value of a contract over a certain period,
typically annual contract value (ACV), which ACV: $3M / 3 years = $1.0M
Contract is the average value of the contract per year, TCV: $600K + $1.2M + $1.2M = $3M
Value or total contract value (TCV), which is the
sum value of the contract over the entire TCV is synonymous with bookings
contract period.
The sum of all recurring revenue from a
contract, usually measured annually (ARR) As of Jan 1 year 1
Growth Drivers | Revenue Recognition

or monthly (MRR). Recurring revenue can ARR: $0

Recurring include both subscription revenue and
recurring services revenue.
CARR: ($3M - $100K) / 3 = $966,667

Revenue As of Mar 1 year 1

Contracted recurring revenue (e.g., CARR) ARR: ($3M - $100K) / 3 = $966,667
refers to the recurring value of all signed CARR: ($3M - $100K) / 3 = $966,667
contracts, regardless of contract start date.
Revenue is money that is recognized once
the product and/or services are delivered to As of Jan 1 year 1
the customer (per GAAP accounting Total Revenue = $0
policies).
Revenue As of Mar 1 year 1
Deferred revenue is billings less realized Total year 1 Revenue = $600K
revenue. Deferred revenue should not be Year 1 Subscription Revenue = $500K
considered revenue because the product or Year 1 Services Revenue = $100K
service has yet to be delivered.

See the ICONIQ Growth SaaS Glossary for more information All examples are illustrative and may not be relevant for all companies. 16
 What does my recurring revenue funnel look like?
The Recurring Revenue Funnel
While the key revenue metric differs across businesses, we focus on recurring
revenue in this guide as it tends to be the “north star” revenue metric for B2B SaaS
companies.1 Understanding all components of the recurring revenue funnel is
critical to understanding the health of the overall business:

Term Formula
Beginning ARR Existing ARR at the beginning of a period (BOP)
BOP ARR

New Logo ARR Expansion ARR

Gross New ARR New ARR from new
customers. This can also
New ARR from existing
customers
GNARR
include reactivations or
win-backs

Upsell ARR Cross-sell ARR

Expansion ARR from Expansion ARR from signing
Expansion ARR increasing recurring
revenue of existing
new contracts (e.g., selling
new product) with existing
contracts with existing customers
customers

Downsell Logo Churn

ARR lost due to customers ARR lost due to customers
Churned ARR downgrading their existing churning by forfeiting
ARR (but remaining active existing contracts or failure
customers) to renew
Growth Drivers | ARR Funnel

Net New ARR Gross New ARR Churned ARR

The sum of new logo and The sum of ARR lost due to
NNARR
expansion ARR churn and downsell

Ending ARR Beginning ARR Net New ARR

EOP ARR

1 Learnings from ICONIQ Growth B2B SaaS portfolio companies

Other forms of recurring revenue (e.g., MRR, CARR) can be substituted 17
 What does my recurring revenue funnel look like?
ARR Funnel Template
Leverage this template to create automated outputs for growth, churn and retention,
and funnel distribution trends that can be used in reporting.

Download our ARR & Logo Funnel Template

 Input ARR, MRR, or CARR values and funnel metrics will be calculated
for automatically:

 Built-in charts to use for reporting:

Growth Drivers | ARR Funnel

This template is a resource to guide users’ reporting. The template and/or portions thereof may not be relevant for all companies 18
 What does my revenue cycle look like?
Revenue Recognition FAQs
ICONIQ Growth best practices

Should we use CARR or ARR?

Companies often track CARR and ARR separately when there is a lag between signing on a
customer (CARR) and full go live (ARR).1 While we expect CARR and ARR to be equivalent for
direct-to-consumer businesses, it is helpful to track both for B2B companies. Where there is
minimal lag between signing and go-live, in our view, ARR is preferred.

When should churn be recognized?

For late renewals: While different time horizons can be utilized depending on the needs and
billing cycles of the customer base, in general, customers should be given a 30-day-or-less grace
period for late renewals. We believe a customer should count as churned in the ARR funnel if
they have not renewed within 30 days of the renewal date, and if they end up renewing they
should be booked as win-back.
For early churns: in general, if a customer churns before they are up for renewal, they should
count as churned in the ARR funnel at time of churn rather than at renewal date.

Should win-backs be included in new logo or

expansion bookings?
Also known as “resells”, win-backs include new revenue driven by a business that was previously
Growth Drivers | Revenue Recognition

a customer and churned. We believe win-backs should be counted as new logos, as they should
have been booked as churned previously.

1 Learnings from ICONIQ Growth B2B SaaS portfolio companies 19

 How quickly and consistently is ARR growing?
Growth Velocity
Growth velocity reveals how quickly and consistently a company is growing and,
historically, has been one of the top metrics correlated with SaaS valuations.1 We
believe businesses should look at both growth velocity overall, and growth velocity
across multiple revenue drivers, including net new, new logo, and expansion:

Term Description Formula

ARR Growth One of the most important metrics to track
and report on, ARR growth looks at the
YoY:
𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
difference between current ARR and ARR (
𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴 12 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑎𝑎𝑎𝑎𝑎𝑎
-1 ) * 100
from a previous period to understand how
quickly ARR is growing. This metric and
QoQ:
the metrics below are most often tracked
on an annual (YoY) or quarterly (QoQ) (
𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
-1 ) * 100
ICONIQ Growth basis, but many companies with a more 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞
benchmarks available
regular reporting cycle also look at these on
(p23)
a monthly (month over month) basis.

Net New While ARR growth is an incredibly

important metric, we need to look at net
YoY2:

Velocity
𝐿𝐿𝐿𝐿𝐿𝐿 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝐴𝐴𝐴𝐴𝐴𝐴
new, new logo, and expansion velocity to (
𝐿𝐿𝐿𝐿𝐿𝐿−1 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁
-1 ) * 100
understand where growth is coming from.
Net new velocity measures how well
companies are able to grow net new ARR
QoQ:
over time, which includes customer (
𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑄𝑄𝑄𝑄𝑄𝑄 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁
-1 ) * 100
expansion and churned ARR. 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑄𝑄𝑄𝑄𝑄𝑄 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁

New Logo New logo velocity measures how well

companies are able to acquire new
YoY:
𝐿𝐿𝐿𝐿𝐿𝐿 𝑁𝑁𝑁𝑁𝑁𝑁 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐴𝐴𝐴𝐴𝐴𝐴
Velocity customers over time. This is particularly
important for early stage companies as it is
(
𝐿𝐿𝐿𝐿𝐿𝐿−1 𝑁𝑁𝑁𝑁𝑁𝑁 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐴𝐴𝐴𝐴𝐴𝐴
-1 ) * 100
Growth Drivers | Growth Velocity

a robust signal of product market fit: while QoQ:

growth velocity tends to decrease over time,
𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑄𝑄𝑄𝑄𝑄𝑄 𝑁𝑁𝑁𝑁𝑁𝑁 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐴𝐴𝐴𝐴𝐴𝐴
it is preferred that new logo velocity remain ( -1 ) * 100
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑄𝑄𝑄𝑄𝑄𝑄 𝑁𝑁𝑁𝑁𝑁𝑁 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐴𝐴𝐴𝐴𝐴𝐴
positive quarter over quarter and year over
year to show consistent growth.

Expansion Like new logo velocity, expansion velocity

measures how well companies are able to
YoY:
𝐿𝐿𝐿𝐿𝐿𝐿 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
-1 )
Velocity expand existing customers over time. This
becomes more important as companies
(
𝐿𝐿𝐿𝐿𝐿𝐿−1 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
* 100

scale and expansion drives a larger QoQ:

proportion of gross new ARR.
𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑄𝑄𝑄𝑄𝑄𝑄 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
(
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑄𝑄𝑄𝑄𝑄𝑄 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴
-1 ) * 100

1 Based on multi-variable analysis on the correlation between revenue growth and public SaaS NYM forward revenue multiples (includes all software companies
with an IPO date in 2013 or later)
2 “LTM” = last twelve months. “LTM-1” is the 12-month period prior to the last twelve months. These formulas give annual velocity. 20
 What’s driving this growth?
Composition of Revenue
To understand growth velocity, we believe companies must also understand what
exactly is driving this growth by looking at the composition of revenue across various
factors. Best practice is to track revenue by type, with multiple levels of granularity
across products, services, channels, geographies, and more:

Other key questions & metrics to consider:

How much is new logo vs. customer expansion contributing to growth as we scale?
New logo vs. expansion distribution is one of the most useful ways to understand what’s driving growth
in a SaaS business and an important indicator of customer health. Best practice is to track bookings and
ARR across new logo vs. expansion – and splitting expansion into upsell vs. cross-sell when relevant.
Recommended metrics:
• % of gross new ARR that is from new logos vs. customer expansion ICONIQ Growth
• % of gross new expansion ARR that is upsell vs. cross-sell benchmarks available
(p24)

What are the key market segments driving our growth?

Segment refers to the particular customer type and/or market a company is selling into. Depending on a
company’s segmentation, this could be based on customer size and/or other variables such as customer
geography and vertical. When relevant, we typically see these analyses combined – for example, ARR by
segment and region.
Growth Drivers | Composition of Revenue

Recommended metrics:
• % of ending ARR by customer size (e.g., SMB vs. Mid-Market vs. Enterprise)
• % of ending ARR by geo (e.g., AMER, EMEA, APAC, ROW)

How are we monetizing across our different products and services?

It’s important to understand how the organization is prioritizing different types of revenue streams over
time and how each product and service is being monetized. As the north star for many SaaS companies,
recurring subscription revenue is often prioritized over one-time revenue from services fees, but as
companies scale it’s important to monetize both as mutual drivers of profit margins.
Recommended metrics:
• % of ending ARR by product (if multiple products/platforms)
• % of bookings by revenue type (e.g., subscription vs. services)
• % of services bookings by type (e.g., implementation vs. managed services)

1 ICONIQ Growth Proprietary Survey of GTM Leaders (Mar 2023). See more information about this data source in Building GTM Teams p8 21
 02 Sales Funnel
Key Questions + Metrics

Key questions Metrics Page #

to understand to track
What’s my top of funnel # MELs p23
# MQLs
volume?
# SQLs
# SALs

What’s driving top of funnel? Lead source / attribution p25-28

Lead conversion rates by source
Lead activity (calls, meetings, emails)

Do we have enough top of MEL to MQL conversion rate p26

MQL to SQL conversion rate
funnel to achieve sales targets?
SQL to SAL conversion rate
SAL to Opportunity conversion rate

What does my pipeline look # Opportunities p24-27

Pipeline $
like? Pipeline coverage
Sale type (new logo, upsell, cross sell,
services)
Pipeline conversion rates by sale type
Pipeline source / attribution
Pipeline conversion rates by source

Do I have high pipeline fidelity? Qualification criteria p29

Commit criteria
Estimated deal size accuracy
Opportunity activity (calls, meetings, emails)
00 Do we have enough pipeline to Weighted pipeline $ p25-27
Weighted pipeline coverage
01 achieve sales targets? Cycle time (time in stage)
Conversion rate by stage
02 Win rate
Close rate
03 Win rate vs. competitors
Forecast as % of sales target
04 Forecast as % of sales capacity
05 See forecasting methodologies in 06. Fiscal Maturity

06
22
 What’s my top of funnel volume?
Stages of the Sales Cycle
There are many ways to design a sales cycle, or “go-to-market funnel”, and many
different naming conventions for funnel stages and sub-stages. This is an archetype
of the key funnel stages that we commonly see across sales-led B2B SaaS.

MEL MQL SAL SQL Opportunity Won/Lost

Type Definition Exit Criteria

New A potential user or buyer that has not yet
meaningfully engaged with the solution or
 Lead hits the defined scoring
threshold and becomes an MEL
Lead organization. Marketing and/or sales is trying to  Lead is disqualified
move new leads down-funnel by spreading
awareness

MEL A New Lead becomes an MEL when the lead

displays some level of engagement with the
 Lead hits the defined scoring
threshold and becomes an MQL
Marketing company or product. These leads are vaguely aware  Lead is moved into a Nurture stage to
Engaged Lead
of the product and/or service but have not been attract additional engagement
qualified.  Lead is disqualified

MQL MQLs fit the ideal customer profile and have

expressed interest in the product and/or services
 Lead is moved to SAL if it matches
qualifying criteria and parameters
Marketing either implicitly via online engagement, or explicitly  Lead is moved to Nurture if it doesn’t
Qualified Lead
via contact form submission, demo requests, etc. meet qualifying criteria, but may in
These are “sales-ready” leads, so this stage often the future
involves a lead handoff from Marketing to Sales.  Lead is disqualified

SAL SALs are leads that meet a set of criteria but have not
yet engaged in the buying cycle. SAL criteria should
 The lead meets acceptance criteria
and is moved to SQL
Sales Accepted be specific to the ideal customer profile – this  The lead is returned to Marketing for
Lead
Sales Funnel | Sales Cycle Stages

provides an added layer of qualification to ensure Nurture; or

the leads getting worked by Sales are high quality.  Lead is disqualified

SQL SQLs meet the ideal customer profile and are

engaged with the organization but have not met
Exit criteria will differ based on a
company’s Opportunity requirements
Sales Qualified Opportunity criteria. At this point, the SQL is trying
Lead
to understand a problem and the available solutions, “BANT” is a common framework used
and the goal of this stage is for the sales rep (in SLG) during this stage (e.g., lead must have
or the product (in PLG) to guide the SQL further into two of the four BANT criteria to become
the buying process. an opportunity)

Oppty Details in Opportunity Stages

Opportunity

The sales cycle shown is primarily relevant for sales-led or sales-involved growth companies. This is an illustrative archetype; not all sales-led B2B SaaS
companies will have the stages shown here and some may benefit from different stages than those shown here. 23
 What does pipeline look like?
Sales Cycle: Opportunity Stages
When opportunity criteria are met, a deal is created with ~5 or so sub-stages that
align to the buyer’s decision-making process. Opportunity stages can differ
drastically, particularly for companies targeting SMB vs. enterprise customers.

MEL MQL SAL SQL Opportunity Won/Lost

Type Buyer Signals Seller Actions

Stage 1 The buyer is trying to understand: how
does this solution help me fill a gap, is
The seller educates the buyer and discover more
about their questions, need, and authority.
this gap a top priority for my company in A deal is usually considered “Pipeline” once it
the near-term, and is my company a good reaches Opportunity Stage 1 or 2, and the deal
fit for this product and service? value is equal to pipeline dollars

Stage 2 The buyer is evaluating available

solutions and identifying use cases. The
The seller continues discovery and demonstrates
use cases and functionality aligned to specific
buyer is starting to think about value and challenges to prove future ROI for the customer
ROI

Stage 3 The buyer is trying to make a decision

about whether to buy the product and/or
The seller validates that their solution solves a
compelling need or opportunity, meets the
service buyer’s decision criteria, and is differentiated
from competition

Stage 4 The buyer is justifying the purchase based

on the business value of the partnership
The seller scopes the project and delivers pricing
and implementation proposals

Stage 5 The buyer is finalizing the agreement,

managing the internal procurement
The seller negotiates the agreement, navigates
the procurement process, and prepares for a
process, and negotiating pricing / terms. transition to the first stage of the customer
Sales Funnel | Sales Cycle Stages

journey (e.g., implementation & onboarding)

Won / The buyer signs the agreement or decides

The seller gets contractual agreement and, if
applicable, execute an effective handoff to the
Lost not to move forward with the deal
account management team

For us, selling mostly to SMB customers, the first interaction should be the best interaction.
We do everything possible to close the deal in that first initial call – we do demos, share
pricing details, implementation timelines, product roadmap, and onboarding
details, all in the very first meeting.1
Revenue Leader | Late-Stage Vertical SaaS

1 Paraphrased statement from a leader in the ICONIQ Growth portfolio and network. For a complete list of ICONIQ Growth portfolio companies, see the appendix
The sales cycle shown is primarily relevant for sales-led or sales-involved growth companies. This is an illustrative archetype; not all sales-led B2B SaaS companies will
have the stages shown here and some may benefit from different stages than those shown here. 24
 Do I have enough pipeline to meet sales targets? (1 of 3)
Pipeline KPIs
In addition to understanding how many leads and deals are in each stage of the sales
cycle, these KPIs can help companies understand what that pipeline means in the
context of sales targets, which can help forecast more effectively based on pipeline
health:

Pipeline $ Pipeline measures the value of all opportunities that qualify as pipeline per a
company’s sales cycle

Pipeline $
Sum of the value of all opportunities set to close in a period (e.g., this quarter, all-
time)
𝑆𝑆𝑆𝑆m (value for all opportunities set to close in period)

Weighted Pipeline $
The pipeline $ likely to be closed won in a period, based on probably of conversion

𝑆𝑆𝑆𝑆m (value for all opportunities set to close in period) * conversion rate %

% probability can be calculated in various ways based on sales assessment or historical

conversion rates. See forecasting KPIs and methodologies in section 06. Fiscal Maturity

Pipeline Pipeline coverage compares pipeline $ to sales targets to measure attainment

outlook, serving as an early indicator of pipeline deficiency. Pipeline coverage can
Coverage be measured against company or team-wide sales targets but is most helpful to
measure at the individual rep level. Typically, the goal should be to have 3x+
pipeline coverage ahead of the next quarter.

Pipeline Coverage
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 $ 𝑡𝑡𝑡𝑡 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Unweighted pipeline $ set to close
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑓𝑓𝑓𝑓𝑓𝑓 𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Vs. the sales target for a period

Weighted Pipeline Coverage 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 $ 𝑡𝑡𝑡𝑡 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 ∗ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 %
Pipeline forecasted to convert
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑓𝑓𝑓𝑓𝑓𝑓 𝑡𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
vs. the sales target for a period
Sales Funnel | Pipeline KPIs

Cycle Time Duration of time a lead or deal is in a certain stage of the sales cycle. For SMB-
focused companies, cycle time is measured in days or weeks, whereas it is typically
measured in weeks or months for enterprise-focused companies. Sales cycle time is
calculated as the amount of time from pipeline (usually opportunity stage 1) to closed
won and should be calculated separately for each of a company’s market segments:

𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 − 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑

Continued on next page

25
 Do I have enough pipeline to meet sales targets? (2 of 3)
Pipeline KPIs
In addition to understanding how many leads and deals are in each stage of the sales
cycle, these KPIs can help companies understand what that pipeline means in the
context of sales targets, which can help forecast more effectively based on pipeline
health:

Conversion The percent of leads or deals that get from one stage to another in the sales cycle.
Key examples:
Rates
Win Rate
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑤𝑤𝑤𝑤𝑤𝑤
The % of opptys that get from
pipeline to closed won 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑤𝑤𝑤𝑤𝑤𝑤 + 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙

Close Rate 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑤𝑤𝑤𝑤𝑤𝑤 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

The % of opptys created in a period
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
that are closed won in that period

Self-Serve Conversion Rate

In product-led growth, the % # 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑆𝑆𝑆𝑆 𝑡𝑡𝑡𝑡 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
of self-service (SS) users # 𝑜𝑜𝑜𝑜 𝑆𝑆𝑆𝑆 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢
that convert to paid accounts

SQL to Closed Won

𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 − # 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜
The % of leads that get from SQL
𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑤𝑤𝑤𝑤𝑤𝑤 + 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙
to closed won

Win Rate vs. Competitors

The % of opptys that get 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑤𝑤𝑤𝑤𝑤𝑤 𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖
from pipeline to closed won 𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁𝑁 𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑤𝑤𝑤𝑤𝑤𝑤 + 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖

Deal Size Total Avg Deal Size 𝐸𝐸𝐸𝐸𝐸𝐸 𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝐴𝐴𝐴𝐴𝐴𝐴
I.e., Average Sales Total Pipeline $ set to close 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑎𝑎𝑎𝑎 𝑒𝑒𝑒𝑒𝑒𝑒 𝑜𝑜𝑜𝑜 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Price (ASP)
Sales Funnel | Pipeline KPIs

New Logo Avg Deal Size

𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑁𝑁𝑁𝑁𝑁𝑁 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐴𝐴𝐴𝐴𝐴𝐴 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Looks at total NDR for the
last twelve months # 𝑛𝑛𝑛𝑛𝑛𝑛 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

Average Contract Value (ACV)

𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣
Averages the annual
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙
value of the contract

Continued on next page

26
 Do I have enough pipeline to meet sales targets? (3 of 3)
Pipeline KPIs
In addition to understanding how many leads and deals are in each stage of the sales
cycle, these KPIs can help companies understand what that pipeline means in the
context of sales targets, which can help forecast more effectively based on pipeline
health:

Forecast vs. With a robust forecasting methodology, metrics that measure forecast vs. goal will
perhaps be the best way to understand whether a company has enough pipeline to
goal meet sales targets.

These are two of the most common ways to calculate forecast vs. goal, and it is
recommended to track both to understand how sales capacity is tracking against
sales target. In both cases, any revenue metric can be utilized (e.g., net new ARR or
gross new ARR)

Forecast as % of Sales Target

Compares the pipeline forecast $ to 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 $ 𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑋𝑋
the sales target for a period, calculating 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑋𝑋
expected attainment vs. goal

Forecast as % of Capacity1
Compares the pipeline forecast $ to
the capacity, or the maximum amount 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 $ 𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑋𝑋
of ARR that could be generated by 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑋𝑋
quota-carrying reps (QCRs), for a
period

See more information on forecasting methodologies in 06. Fiscal Maturity

Sales Funnel | Pipeline KPIs

1 See Team & Productivity for how to measure sales capacity 27

 What’s driving top of funnel and pipeline?
Lead & Opportunity Sources
While knowing what the lead and opportunity funnels look like is the first step, the
next step is to understand exactly what’s driving new leads to enter the funnel and
move through it. For this, it’s necessary to track lead and opportunity sources.
In an ideal state, a lead that meets a company’s ICP will be targeted across all go-to-
market channels, including marketing, sales, and partnerships. There are rarely
clean-cut scenarios when a lead has one single source. However, we believe it’s still
helpful to track lead source information to be able to attribute outcomes to
investment.
There are two main types of lead or opportunity “sources”:

Origin source
Refers to where the lead or opportunity originated in terms of ongoing go-to-market efforts:

A lead that opted into contact with the organization in some way, such as by signing up for a
Inbound mailing list, filling out a web form, downloads content, etc. In terms of attribution, inbound
leads are often attributed to marketing efforts.

A lead that is specifically targeted by outreach by the organization, such as via direct
Outbound outbound emails, cold calls, or mail.

A lead that has been referred to the organization by a third party that is not a partner (as
Referral partner-sourced leads should be tracked separately). These kinds of referrals often come from
existing customer or investor.

Partner A lead that is brought to the organization by a partner such as a referral partner or reseller
Sales Funnel | Lead & Opportunity Source

Marketing channel source1:

Refers to how new leads arrived at a company’s website or other information hub, for example:

Direct traffic Online Direct to the website (no other channels utilized)

Email Marketing Online Via an email marketing campaign such as a newsletter or blog

Socials Online Via a social media link

Organic Search Online Via a search engine

Paid Search Online Via a search engine because of a paid advertising campaign

Events Offline Via an event such as a conference

Other offline Offline Via media and grassroots marketing efforts, television, sponsorship, etc.

1 Not exhaustive – marketing channel sources may differ in breadth and granularity by company 28
 Sales Funnel
Pipeline FAQs
Industry Perspectives

When should an opportunity become pipeline?

A CRO needs to really challenge their team on pipeline integrity. We’ve created a very
strong definition for pipeline:
 The company and the persona(s) involved meet our ICP
 A champion has been identified and is engaged
 A specific pain point has been identified that we can solve
 We have a meaningful next step that aligns to our sales process
Revenue Leader | Late-Stage Infrastructure SaaS1

How do leaders drive pipeline integrity?

Having a centralized pipeline source-of-truth is paramount to pipeline integrity – and a
CRO should be a power user of this tool. We use Salesforce, and we track every single
piece of data from sales activities to website interactions and product usage. Our CEO
is present at every pipeline meeting, and we look at all this information live to ensure
quality, consistency, and accountability.
Revenue Leader | Late-Stage Infrastructure SaaS1

What metrics matter most in the sales cycle?

We have found a direct correlation between the number of customer meetings our
sales reps have per day to the number of new logos we close. Then I look at a quality
score for each customer meeting, which shows me who was involved and how likely
that deal is to close.
Sales Leader | Growth-Stage Application SaaS1

Identify which use cases have the best conversion rates and most efficient cycle times –
that will be your best way to your foot in the door with enterprise customers. You can
start small, and once you’re in you’ll have massive upsell opportunity.
Sales Funnel | Pipeline

Revenue Leader | Late-Stage Collaboration & Workflow SaaS1

As an SMB business, time is the most important factor in our deals. Our goal is to get
the customer from A to B in the fastest way possible, so we look at cycle time for each
stage and the percent of initial meetings that convert to closed deals.
Sales Leader | Late-Stage Vertical SaaS1

1 Paraphrased statement from a leader in the ICONIQ Growth portfolio and network. For a complete list of ICONIQ Growth portfolio companies, see the appendix. 29
 Do I have enough pipeline and top of funnel to meet targets?
Pipeline & Leads Template
Leverage this template to create automated outputs for weighted and unweighted
pipeline, pipeline vs. bookings, lead conversion rates, and more that can be used in
top-of-funnel reporting.

Download our Pipeline, Leads, and Top of Funnel Template

 Input ARR, MRR, or CARR values and funnel metrics will be calculated
for automatically:

 Built-in charts to use for reporting:

Growth Drivers | ARR Funnel

This template is a resource to guide users’ reporting. The template and/or portions thereof may not be relevant for all companies 30
 03 Retention
Key Questions + Metrics

Key questions Metrics Page #

to understand to track

How am I retaining and Net dollar retention p32

expanding my existing customer Gross dollar retention
Cohort retention
base?
Logo retention

Why are customer churning and Churn & lost reasons p33
how is this changing over time? Won / lost analysis

How are we quantifying Product usage & adoption metrics: p34-35

customer health and what are • Active users
• Adoption rate
our leading indicators of churn?
• Stickiness rate
• User retention rate
• User growth rate

Customer satisfaction metrics:

• Time to implement
• Net promoter score
• Customer satisfaction score
00 • Customer effort score
01 • Customer referenceability

02
03
04
05
06
31
 How are we retaining and expanding existing customers?
Retention Metrics
Retention – both revenue and logo – signals the efficiency of a company’s growth by
measuring its ability to retain and expand existing customers. We believe this makes
retention one of the most important gauges of business health, as it is correlated
with everything from product market fit to customer health.

ICONIQ Growth preferred methodology

Net Dollar Quarterly Annualized NDR %

Retention1 Annualized quarterly NDR to
NDR help show quarter over quarter 𝑞𝑞𝑞𝑞𝑞𝑞 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝐴𝐴𝐴𝐴𝐴𝐴 − 𝑞𝑞𝑞𝑞𝑞𝑞 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴 ∗ 4
fluctuations, which is 1+
𝑎𝑎𝑎𝑎𝑎𝑎(𝐵𝐵𝐵𝐵𝐵𝐵 𝐴𝐴𝐴𝐴𝐴𝐴 + 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴)
i.e., Net Revenue particularly important for
Retention (NRR) early-stage companies

ICONIQ Growth Annual (LTM) NDR % 𝐿𝐿𝐿𝐿𝐿𝐿 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 − 𝐿𝐿𝐿𝐿𝐿𝐿 𝑛𝑛𝑛𝑛𝑛𝑛 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝐴𝐴𝐴𝐴𝐴𝐴
benchmarks available Looks at total NDR for the 1+
(p24) 𝑎𝑎𝑎𝑎𝑎𝑎(𝐵𝐵𝐵𝐵𝐵𝐵 𝐴𝐴𝐴𝐴𝐴𝐴 + 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴)
last twelve months

Cohort NDR %
Looks at annual (LTM) NDR for the specific cohorts of companies (e.g., all companies
that signed within a given quarter). This helps businesses better understand what’s
driving changes in retention over time

Gross Dollar Quarterly Annualized GDR %

𝑞𝑞𝑞𝑞𝑞𝑞 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴 ∗ 4
Calculates the annualized percent
Retention of ARR retained from existing
1−
𝑎𝑎𝑎𝑎𝑎𝑎(𝐵𝐵𝐵𝐵𝐵𝐵 𝐴𝐴𝐴𝐴𝐴𝐴 + 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴)
GDR customers
i.e., Gross Revenue Annual (LTM) GDR %
Retention | Measuring Retention

Retention (GRR) 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴 𝐿𝐿𝐿𝐿𝐿𝐿

Looks at the total GDR for the 1−
𝑎𝑎𝑎𝑎𝑎𝑎(𝐵𝐵𝐵𝐵𝐵𝐵 𝐴𝐴𝐴𝐴𝐴𝐴 + 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴)
last twelve months

Logo Logo Retention / Renewal Rate %

Calculates the % of customers a # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
Retention B2B business retains in a period
1−
𝑎𝑎𝑎𝑎𝑎𝑎(𝐵𝐵𝐵𝐵𝐵𝐵# 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 + 𝐸𝐸𝐸𝐸𝐸𝐸 # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐)
i.e., Customer or (can be annualized or annual LTM)
Logo renewal rate
Logo Churn Rate %
The opposite of logo retention, # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
the % of customers a B2B business 𝑎𝑎𝑎𝑎𝑎𝑎 (𝐵𝐵𝐵𝐵𝐵𝐵 # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 + 𝐸𝐸𝐸𝐸𝐸𝐸 # 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐)
loses in a period due to churn

BOQ = Beginning of quarter; EOQ = end of quarter; BOP = beginning of period; EOP = end of period
It is recommended to average BOP and EOP ARR in the denominator to adjust for quarter over quarter ARR growth. Alternatively, BOP ARR can be used. 32
 Why are customer churning and how is this changing?
Churn & Lost Reasons
Companies should assign a primary reason for every lost opportunity or customer
churn / downsell. While multiple reasons often apply, tracking primary lost reasons
can help diagnose important sales process or product gaps that can be filled.
While churn & lost reasons should be catered to a company’s market and buyers,
the important thing is that each option reflects a root cause. For example, we often
see a “Timing” category, but this category can often be better categorized into one
of the options below:

Lost Reason Definition

For use when the prospect or customer loses budget or can’t get budget approved.
Budget This is often related to company or economic performance, or can also indicate lack
of access to the budget owner / executive sponsor

No Decision For use when a prospect or customer is unresponsive or not ready to buy

For use when a customer churns or an opportunity is lost to a competitive

Competition organization or solution, including an in-house or “build” solution. Also track:
Competitor name, including “unknown” or “in-house”
Retention | Understanding Churn & Lost Opportunities

Lack of sponsor For use when a deal was lost due to lack of executive sponsor / buyer

For use when the customer goes through a major change that inhibits a deal.
Business Change Significant business changes include company acquisitions, restructurings, and
liquidations
Unlike budget, the price category should be used when the budget exists, but the
Price customer can’t justify the quoted price. This can suggest a price-value-mismatch
Prospect or customer requires features or product functionality that is not available or
Functionality does not meet current needs or expectations. Also track: Feature request(s) and/or
product feedback
For use when the root cause of a churn or downsell is implementation related (e.g.,
Implementation time to value, delayed or unfulfilled implementations)
For use when the product or service was delivered to a customer, but lack of adoption
Lack of Adoption led to churn
For use when the team “dropped the ball” on an opportunity by lack of coverage or
Dropped Ball follow-up (most often, when a sales rep leaves and account transitions are mis-
managed). This should only be used when the options above are not relevant
For use when after additional discovery, this company does not meet the ideal
customer profile and should not have been qualified. Opportunities lost due to bad fit
Bad Fit* should not be included in lost count but should be reviewed regularly and used to
refine ICP and qualification criteria.

* Do not include in “lost” opportunity count

33
 What are leading indicators of retention? (1 of 2)
Product Usage & Adoption Metrics
We believe product usage and adoption metrics are the strongest leading indicators
for customer retention and are therefore the best way to measure customer health.
While product and engineering teams should look at usage and adoption metrics
holistically, go-to-market teams should also track these metrics at the customer level
to understand how each customer is utilizing the product.

ICONIQ Growth preferred methodology

Active User Measures the proportion of users that are active users (hit a minimum activation
threshold on a daily, weekly, or monthly basis) out of the total user pool of a specific
Rate customer:

# 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

Daily active user (DAU) rate % 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
* 100

# 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

Monthly active user (DAU) rate % 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
* 100

Adoption Rate Measures the portion of users that have adopted a new feature or product. This
metric is most useful in the first ~12 months after releasing a new product (or
activating a new product / feature for a specific customer)

Product adoption rate %

Daily or monthly active users 𝑁𝑁𝑁𝑁𝑁𝑁 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
*100
can be used, and this can also 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
Retention | Leading Indicators of Retention

apply at the feature-level

Stickiness Rate (%) Measures how well the 𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
∗ 100
product is retaining active users 𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

User Measures the retention of users at a given customer

Retention Net user

1+
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑛𝑛𝑛𝑛𝑛𝑛 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 − 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
∗ 100
retention %
Rate 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝐵𝐵𝐵𝐵𝐵𝐵

Gross user 1+
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝐸𝐸𝐸𝐸𝐸𝐸 − 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜𝑜 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
∗ 100
Retention % 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝐵𝐵𝐵𝐵𝐵𝐵

User Growth (%) Measures how quickly and

consistently a customer’s user base 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝐸𝐸𝐸𝐸𝐸𝐸
Rate is growing. This can be measured on 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝐵𝐵𝐵𝐵𝐵𝐵
∗ 100

a monthly, quarterly, and/or annual basis

BOP = beginning of period; EOP = end of period 34

 What are leading indicators of retention? (2 of 2)
Customer Health Metrics
While we believe product usage and adoption metrics are the strongest leading
indicators of customer health, churn, and retention, various customer satisfaction
metrics should also be tracked. These can provide supplemental insight into how
the customer and user experience an organization’s product and services:

Time to Compares the time it

took to implement a
Implement customer to the expected
𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 𝑓𝑓𝑓𝑓𝑓𝑓 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
* 100
or promised
vs. goal implementation timeline

Customer Compares the number of

users signed up from a # 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑢𝑢𝑢𝑢 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
Penetration Rate Specific customer to the 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 # 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
* 100
total addressable user pool
at that customer

Net Promoter Measures the likelihood of a user to recommend the product to another potential
user
Score % of promoters at company X - % of detractors at company X
NPS

Customer Effort Measures the ease with

which a customer interacts
Score with a specific product, # 𝑜𝑜𝑜𝑜 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 # 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
* 100
CES service, or support experience
Retention | Leading Indicators of Retention

(based on a likert scale)

Customer Best used for measuring a

customer’s satisfaction with
Satisfaction a company’s support or
# 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑎𝑎𝑎𝑎 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢𝑢 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑋𝑋
* 100
CSAT service offerings, rather than
overall customer health

Other indicators of customer health

In addition to product usage and adoption metrics and the customer health metrics above, there are some
qualitative indicators of customer health worth tracking:
• Health of relationship or engagement with executive sponsor. This can either be a subjective score or measured
by a proxy such as days since last communication with exec sponsor
• Presence of power users. Power users are users that meet a high threshold of activity and adoption in the
product. This can be measured as a true/false or a percentage such as power users / total users
• Account owner relationship sentiment. A subjective health rating for each customer from the relationship
owner (CSM, account manager). Subjective scores should have an accompanying framework that guides
scoring to ensure consistency across the team, and should be considered in the context of other more
objective measures of customer health
35
 04 Efficiency & Economics
Key Questions + Metrics

Key questions Metrics Page #

to understand to track

How efficient and scalable is Gross margin p37-38

our go-to-market motion? Net magic number
Gross magic number
Customer acquisition cost (CAC)
Customer lifetime value (LTV)
LTV / CAC ratio
Payback period

00
01
02
03
04
05
06
36
 Is our go-to-market motion scaling efficiently? (1 of 2)
GTM Efficiency Metrics
Go-to-market is often the largest investment a B2B SaaS company makes in terms of
both people and programs spend.1 As such, we believe it’s imperative to track and
understand go-to-market efficiency as a company scales. The following metrics focus
on how efficiently a company is operating on a per-unit basis:

ICONIQ Growth preferred methodology

Gross Gross Margin (GM)

𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 $

Margin 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟

𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 $

Subscription GM 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟
ICONIQ Growth
benchmarks available
(p46) 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 $
Services GM
𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟

Magic Magic number measures the amount of ARR or revenue gained for every dollar
spent to acquire it, making it a robust signal of GTM efficiency and unit
Number economics.
A magic number calculation should depend on a company’s sales cycle, and
ICONIQ Growth different magic number calculations can be used if sales cycles differ across
benchmarks available segments. The formula included here shows a one-quarter offset such that we are
(p46)
measuring new ARR this quarter relative to spend last quarter to reflect a median
~60-90-day sales cycle. For those with a much shorter or longer sales cycle, that
period offset can be adjusted.
Magic number can also be multiplied by a company’s gross margin to account for
the payback required to fully break even and normalize comparisons across
companies.

𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑞𝑞𝑞𝑞𝑞𝑞 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴

Net Magic Number
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂
Net new ARR per S&M OpEx
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴
Net Magic Number, GM Adjusted * Gross Margin %
Efficiency & Economics

𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂

Gross Magic Number 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴

Gross new ARR per S&M OpEx 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴
Gross Magic Number, GM Adjusted * Gross Margin %
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂

Continued on next page

1 ICONIQ Analytics New Era of Efficient Growth report (Aug 2023) 37

 Is our go-to-market motion scaling efficiently? (2 of 2)
GTM Efficiency Metrics
These metrics zoom further into the unit economics of a business. There are many
ways to calculate CAC, LTV, and payback period depending on a company’s
business model, customer base, and finance model. Some preferred methodologies
are included below:

ICONIQ Growth preferred methodology

Customer CAC measures the $ cost of acquiring one new logo via a few primary methods:

Acquisition Simple CAC 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂

Cost (CAC) S&M OpEx per new logo 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑛𝑛𝑛𝑛𝑛𝑛 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

Paid CAC (by channel)

𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑜𝑜𝑜𝑜 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
Spend on a channel per logos
𝑁𝑁𝑁𝑁𝑁𝑁 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑣𝑣𝑣𝑣𝑣𝑣 𝑋𝑋 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
acquired via that channel
Time-Adjusted CAC
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑞𝑞𝑞𝑞𝑞𝑞 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂
Like magic number, adjusts for
𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑛𝑛𝑛𝑛𝑛𝑛 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑞𝑞𝑞𝑞𝑞𝑞
the lag in a sales cycle

Customer LTV measures the profit acquired over a single customer’s lifetime, with the idea
that the LTV of a customer is greater than the cost to acquire that customer:
Lifetime
Simple LTV1
Value (LTV) Profit on average ARR per
𝐴𝐴𝐴𝐴𝐴𝐴 𝑝𝑝𝑝𝑝𝑝𝑝 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 ∗ 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟
Retained customer
Cohort LTV
Looks at LTV for a specific cohorts of companies (e.g., all companies that signed
within a given quarter). This helps businesses better understand what’s driving
changes in LTV over time

LTV/CAC
The LTV to CAC ratio measures the value
ICONIQ Growth 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝐿𝐿𝐿𝐿𝐿𝐿
of each customer relative to the cost to
Efficiency & Economics

benchmarks available 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

acquire each customer
(p47)

Payback Calculates the duration of time (usually

months) needed for any given customer
Period to “pay back” the customer acquisition
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
𝐴𝐴𝐴𝐴𝐴𝐴 𝑝𝑝𝑝𝑝𝑝𝑝 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 ∗ 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚
cost, effectively showing time to
customer break-even

1 See logo churn rate calculation in Retention Metrics 38

 05 Team & Productivity
Key Questions + Metrics

Key questions Metrics Page #

to understand to track

Is go-to-market team scaling S&M OpEx per S&M FTE p40

efficiently? Key headcount ratios
• AE:CSM
• AE:Manager
• AE:SDR
Employee attrition

Is the go-to-market team Net new ARR per S&M FTE p41-42
scaling productively? Sales capacity
Sales productivity
Quota attainment
Ramp rate

00
01
02
03
04
05
06
39
 Is the GTM team scaling efficiently?
Headcount Efficiency
The following metrics help companies understand headcount efficiency and
productivity in the go-to-market organization, which is an important component to
team planning and hiring, as well as understanding performance vs. goal.

S&M OpEx
Measures go-to-market headcount
per S&M FTE efficiency by looking at average S&M 𝑄𝑄𝑄𝑄𝑄𝑄 𝑆𝑆&𝑀𝑀 𝑂𝑂𝑂𝑂𝑂𝑂𝑂𝑂 ∗ 4
on a per-S&M-employee basis 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑆𝑆&𝑀𝑀 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞
Annualized formula shown
ICONIQ Growth
benchmarks available
(p53)

Headcount Headcount ratios between key go-to-market roles are a great way to measure
whether the team is growing in a scalable manner. As account executives (AEs)
Ratios typically make up the largest portion of any go-to-market organization, headcount
is usually compared between AEs and other key roles such as CSMs and managers.
Companies should track this over time with the goal to increase leverage as a
company scales, allowing for AE headcount ratios to increase:

# 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴

Account Execs per CSM
# 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠𝑠 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚
Team & Productivity | Headcount Efficiency

# 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴

Account Execs per Sales Manager
# 𝐴𝐴𝐴𝐴 𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚𝑚
ICONIQ Growth
benchmarks available # 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝐴𝐴𝐴𝐴𝐴𝐴
(p39-43) Account Execs per SDR
# 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑜𝑜𝑜𝑜 𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏𝑏 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟

Employee Employee attrition, both voluntary and involuntary, is typically highest in a SaaS
company’s go-to-market organization (sales in particular). In the case of quota-
Attrition carrying teams, attrition can have a major impact on sales capacity, a primary
driver of overall attainment. It’s important to track and forecast attrition effectively
to better forecast hiring needs relative to goals.

ICONIQ Growth Relatedly, it’s important to track

benchmarks available voluntary vs. involuntary attrition, # 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑
(p60) with an added layer of reason codes 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 # 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
for voluntary attrition

40
 Is the GTM team scaling productively? (1 of 2)
Headcount Productivity
The following metrics help companies understand headcount efficiency and
productivity in the go-to-market organization, which is an important component to
team planning and hiring, as well as understanding performance vs. goal.

ICONIQ Growth preferred methodology

NNARR per Measures go-to-market headcount

𝑄𝑄𝑄𝑄𝑄𝑄 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 ∗ 4
productivity by looking at net new ARR
S&M FTE acquired on a per-S&M-employee basis
𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑆𝑆&𝑀𝑀 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞

Annualized formula shown

Sales Measures the maximum amount of ARR that could be generated by quota-carrying
reps (QCRs) in a given time period, while taking into account ramp, attainment, and
Capacity attrition. This can be measured on a monthly, quarterly, or annual basis, and be
looked at on a total or per rep basis:

Total Sales Capacity1 Allocated quota in qtr * % quota attainment * QCR retention rate

(𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞 ∗ 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎)

Capacity per QCR (𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞 ∗ 𝑄𝑄𝑄𝑄𝑄𝑄 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟)
Team & Productivity | Headcount Productivity

Sales Rep Measures the amount of actual ARR generated per quota-carrying rep, which can
also be measured on a monthly, quarterly, or annual basis. Net productivity is
Productivity preferred as it takes into account churn (regardless of whether sales owns
renewal and expansion)

Net Productivity 𝑄𝑄𝑄𝑄𝑄𝑄 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴

Net new ARR per QCR 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞

Gross Productivity 𝑄𝑄𝑄𝑄𝑄𝑄 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴

Gross new ARR per QCR 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑖𝑖𝑖𝑖 𝑞𝑞𝑞𝑞𝑞𝑞

Continued on next page

1 Allocated quota in qtr is the sum of all individual contributor quotas for a given quarter less quotas unallocated due to ramp 41
 Is the GTM team scaling productively? (2 of 2)
Headcount Productivity
The following metrics help companies understand headcount efficiency and
productivity in the go-to-market organization, which is an important component to
team planning and hiring, as well as understanding performance vs. goal.

ICONIQ Growth preferred methodology

Quota While a couple ways to calculate quota attainment are included here, the best
practice is to look at the distribution of quota attainment over time, either in a 100%-
Attainment stacked-bar-chart format or in a histogram format. See an example displayed in our
GTM board deck template:

Team Quota Attainment

𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑎𝑎𝑎𝑎 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 100% 𝑜𝑜𝑜𝑜 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞
Measures the % of sales reps
𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄
achieving quota

Rep Attainment 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

ICONIQ Growth Measures the average % of quota 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
benchmarks available attained by each quota-carrying rep
(p57)

Ramp Rate Ramp rate measures a company’s ability to onboard new sales reps effectively, a
critical component of scaling any go-to-market team.
Team & Productivity | Headcount Productivity

Ramp Rate # 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎 𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞𝑞 𝑖𝑖𝑖𝑖 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟
% of reps achieving quota 𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇𝑇 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑖𝑖𝑖𝑖 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓𝑓 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟
in first period after fully ramped

Cohort Ramp Rate

Looks at how ramp rate changes over time by comparing different cohorts of sales
reps (e.g., all sales rep hires that started within a given quarter to those that started
the next quarter). Businesses want to see ramp rate improve over time as they invest
in onboarding, training, coaching, and enablement programs.

42
 06 Fiscal Maturity
Key Questions + Metrics

Key questions Metrics Page #

to understand to track

How are we getting from Forecasting methodologies: p44-45

pipeline to forecast? • Assessment forecast
• Stage forecast

See related forecast vs. goal metrics in 02. Sales Funnel

Are we achieving revenue Attainment vs. plan p46-47

predictability and “Beat and raise”
repeatability?

00
01
02
03
04
05
06
43
 How are we getting from pipeline to forecasts? (1 of 2)
Pipeline Forecasts
There are many forecasting methodologies, each with pros and cons depending on
a company’s go-to-market motion and sales cycle.

The simple forecasting methodologies included here are often used in the early
stages of company growth. As companies scale and approach revenue predictability,
more complex methodologies are developed, and many companies invest in tooling
to build robust statistical forecasting models.

Assessment forecast
An assessment forecast, also known as an “intuitive forecast”, relies on human assessment of the likelihood
that an opportunity will be won. Sales reps, sales managers, and sales leadership assign one of the following
assessment categories to each opportunity, as well as a probability (%) that the opportunity will be won. The
assessment category can have a fixed % probability associated with it, or the % probability can be chosen
from a range within that assessment category:

Assessment Description Pipeline $ % probability1 Forecast

Opportunities that are expected to be closed won

Commit within the period in question (e.g., this quarter)
$0.5M 90% $450K

Opportunities that are fully qualified and likely to

Best Case close in period, but are too early in the sales cycle to $1.5M 75% $1,125K
commit to or have risk
Opportunities that are too early in the sales cycle to
allocate as best case or commit. However, these are
Pipeline qualified opportunities that should not be
$2M 25% $500K
completely omitted from the forecast.
Opportunities that should be omitted from the
Omitted forecast because they have not yet been qualified or $0.5M 0% $0
are unqualified, but have yet to be closed lost

Pipeline Forecast2 $2,075K

Fiscal Maturity | Forecasting

Rules of thumb when using assessment forecasts:

• Assessment category should be independent from opportunity stage. Assessments are subjective
categorizations made regardless of which stage of the sales cycle a deal is in. However, sales stage should be
used as a gauge for assessment accuracy (e.g., should this stage 1 opportunity be categorized as commit?)
• Assessments should be made at multiple levels of the sales organization. To improve the accuracy of these
forecasts, assessments should be made by individual sales reps, sales managers, and sales leadership. Final
assessments are often a combination of the assessments made at each level of the team

Continued on next page

1 % probability values shown here are examples. Companies should use their own probability allocations based on their sales cycle and historical actuals
2 Pipeline forecast does not include churn 44
 How are we getting from pipeline to forecasts? (2 of 2)
Pipeline Forecasts
There are many forecasting methodologies, each with pros and cons depending on
a company’s go-to-market motion and sales cycle.

The simple forecasting methodologies included here are often used in the early
stages of company growth. As companies scale and approach revenue predictability,
more complex methodologies are developed, and many companies invest in tooling
to build robust statistical forecasting models.

Stage forecast
A stage forecast is considered slightly more robust than an assessment forecast. Stage forecasts use historical
conversion rates from one stage to the next to predict the likelihood of an opportunity to be closed won. For
example:

Opportunity Stage Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Total

Pipeline $ $1M $0.8M $0.5M $0.6M $0.2M $3.1M

Win Rate1 10% 23% 50% 72% 95% 35%

Pipeline Forecast2 $100K $184K $250K $432K $180K $1.1M

Rules of thumb when using stage forecasts:

• Conversion rates should reflect a recent time horizon. Using all-time historical conversion rates can under-
or over-estimate the likelihood a deal will be won. Depending on the velocity of the sales cycle, it is
recommended to use a more recent time horizon (e.g., last-90-day conversion rates for companies with
high velocity sales, last-12-month conversion rates for companies with enterprise sales cycles).
• Use segment-specific conversion rates. Conversion rates can differ drastically between segments (SMB,
mid-market, enterprise), so expected conversion should reflect a deal’s segment and any other important
variables such as product / SKU.
• Conversion rates utilized can also take into account future expected changes. In some cases when an
outcome can be reasonably predicted, an adjusted conversion rate can be utilized that increases or
Fiscal Maturity | Forecasting

decreases the likelihood an opportunity will be won vs. historical conversion rates. For example, if many
deals have historically been closed lost due to lack of feature functionality, and a feature is being released
to solve for this, win rate may be expected to increase proportionally.

We prefer the stage forecast method. It’s more accurate than assessment
forecasts, and these are often an ineffective use of time for your sales team. We
want our reps to be focused on execution.3
Finance Leader | Later-Stage Infrastructure SaaS

1 Win rate values shown here are illustrative examples (not a benchmark for best in class). Companies should use their own historical conversion rates
2 Pipeline forecast does not include churn
3 Paraphrased statement from a leader in the ICONIQ Growth portfolio and network. For a complete list of ICONIQ Growth portfolio companies, see the appendix 45
 Are we achieving revenue predictability & repeatability? (1 of 2)
Signals of Fiscal Maturity
As companies scale, we believe it should be a priority to approach revenue
predictability and repeatability – and many of the metrics included in this guide
help companies achieve this.
This responsibility should not only reside with the finance team. The go-to-market
teams play a critical role in setting goals and bear the responsibility of providing
accurate forecasts based on high fidelity pipeline and top of funnel projections. The
following metrics can be used to measure progress towards revenue predictability
as an organization scales:

Attainment vs. Plan

Attainment calculations reflect actuals as a % of plan for a period. “Plan” numbers should reflect the original
annual budget, regardless of forecast fluctuations. Attainment should be calculated on a periodic (monthly or
quarterly based on the reporting cycle) and an annual basis, and against both top- and bottom-line metrics.

ARR is used as the primary revenue metric in these top-line calculations but can be substituted for CARR or
run-rate bookings where relevant. Similarly, FCF is used as the bottom-line metric, but can be substituted for
operating income or EBITDA.

ICONIQ Growth preferred methodology

Key top-line attainment metrics
Net new bookings attainment
Attainment vs. plan for net new 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑛𝑛𝑛𝑛𝑛𝑛 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
bookings, which take into account 𝑁𝑁𝑁𝑁𝑁𝑁 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
revenue lost due to churn

Gross new bookings attainment

𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Fiscal Maturity | Attainment vs. Plan

Attainment vs. plan for gross new

𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑛𝑛𝑛𝑛𝑛𝑛 𝐴𝐴𝐴𝐴𝐴𝐴 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
bookings

Ending ARR attainment 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴

Attainment vs. plan for ending ARR 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸 𝐴𝐴𝐴𝐴𝐴𝐴

YoY ARR Growth attainment 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑌𝑌𝑌𝑌𝑌𝑌 𝐴𝐴𝐴𝐴𝐴𝐴 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
Attainment vs. budget for year 𝑌𝑌𝑌𝑌𝑌𝑌 𝐴𝐴𝐴𝐴𝐴𝐴 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
over year ARR growth

Key bottom-line attainment metrics

Free cash flow attainment

𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝐸𝐸𝐸𝐸𝐸𝐸 𝐹𝐹𝐹𝐹𝐹𝐹
Attainment vs. plan for
𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝐸𝐸𝐸𝐸𝐸𝐸 𝐹𝐹𝐹𝐹𝐹𝐹
free cash flow (FCF)

EOP = end of period 46

 Are we achieving revenue predictability & repeatability? (2 of 2)
Signals of Fiscal Maturity
As companies scale, we believe it should be a priority to approach revenue
predictability and repeatability – and many of the metrics included in this guide
help companies achieve this.
This responsibility should not only reside with the finance team. The go-to-market
teams play a critical role in setting goals and bear the responsibility of providing
accurate forecasts based on high fidelity pipeline and top of funnel projections. The
following metrics can be used to measure progress towards revenue predictability
as an organization scales:

The “beat and raise” motion

As SaaS companies approach maturity, they should work towards a “beat and raise” revenue model. A “beat”
refers to quarterly actuals exceeding original estimates, leading to a “raise”, or an increase in management’s
guidance for future quarters.

This is particularly important for companies to develop prior to entering the public markets. A company’s
ability to meet and beat quarterly guidance estimates signals visibility into future performance, strong growth
prospects, and the internal financial and operational rigor to accurately forecast and meet market demand. A
company’s ability to beat and raise is strongly correlated with public market performance.

While beating expectations is important, excessive sandbagging can also be detrimental to market
performance. It is recommended that companies start thinking like a public company about ~2 years prior to
IPO, which includes building “beat and raise” into the forecasting motion.

Beat against revenue

management guidance 𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
% over-attainment vs. management (
𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀 𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
-1) * 100
Guidance (at this stage, this is often
applied to revenue rather than ARR)

Beat against revenue consensus

Fiscal Maturity | “Beat and Raise”

𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑖𝑖𝑖𝑖 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝

% over-attainment vs. consensus (
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒
-1) * 100
estimates (applicable to public
Companies)

We implemented a beat and raise motion 1.5 years before IPO. Every quarter,
we generated a conservative number based on our sales forecast for each
subsequent quarter, and we use that to guide how we set our targets.1
Finance Leader | Later-Stage Infrastructure SaaS

1 Paraphrased statement from a leader in the ICONIQ Growth portfolio and network. For a complete list of ICONIQ Growth portfolio companies, see the appendix
Learn more about the “beat and raise” motion and IPO readiness in ICONIQ Analytics Path to IPO report 47
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Appendix

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 ICONIQ Growth | A global portfolio of
category-defining businesses
Appendix

These companies represent the full list of companies that ICONIQ Growth has invested in since inception through ICONIQ Strategic Partners funds as of the
date these materials were published (except those subject to confidentiality obligations). Trademarks are the property of their respective owners. None of the
companies illustrated have endorsed or recommended the services of ICONIQ. 49
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