Tom Tunguz

JUNE 18, 2019

This section covers employee satisfaction, headcount, and recruiting metrics. Customer Success reviews the net dollar and logo retention, plus churns and expansions. The template is broken into six sections: People, Bookings & Revenue, Cash, Sales, Marketing, Customer Success. You’ll notice there is no engineering section.

Metrics 250

Metrics Sales Recruiting Startup Headcount 250

SaaStr

DECEMBER 11, 2021

They wait for two reasons: first, it’s another headcount, which costs money, which can seem expensive when you have say just $5k-$10k a month in MRR and 6 months of runway left before you’re out of cash. And — this is the counterintuitive part — you must do this even though it will NOT impact churn at first.

Sales Hiring 286

Sales Hiring Customer Success Headcount Churn 286

SaaStr

FEBRUARY 14, 2024

Today we’re focusing on actionable insights you can use to drive down churn with customer success in today’s new era of SaaS efficiency. We all become new customer-oriented, so we say we’re focused on the existing base, but once the sales team becomes 30-40% of headcount, it tends to dominate every conversation.

Customer Success 292

Customer Success Sales Hiring Scale Headcount 292

SaaStr

AUGUST 9, 2024

This was around 2017, and CS became simpler and focused on post-sales, retention, and reduced churn. Headcount isn’t the right story for them, though. Eventually, this team moved out of growth, so their success wasn’t dependent on budget or headcount. Just like hiring, you don’t want to be lazy here.

Scale 284

Scale Sales Hiring Scaling Startup 284

SaaStr

JANUARY 30, 2023

Without headcount planning for the support team, the company’s response time and customer satisfaction scores dipped. Forecasting can help define revenue numbers, the support you need to provide, headcounts, and opportunities to tap into new businesses. Client churn is scary but inevitable. Use your data to inform.

Sales Hiring 269

Sales Hiring Payment Services SaaS Payments Scale 269

SaaStr

JANUARY 25, 2022

And human churn. You start making up for it in volume — with headcount. Here, you often have to start hiring B players because you just need so many people. And team members start to leave routinely. Your life becomes all about recruiting, even more than it was. It’s harder to find that Magical VP that can make a huge difference.

Headcount 246

Headcount AWS SaaS Churn 246

SaaStr

OCTOBER 4, 2023

People loved Zoom and didn’t churn. Then everyone in the world was on Zoom selling flowers and yoga and things meant to be sold in person, so churn peaked at 3.6%, which isn’t terrible for SMB, but was higher than none. Monday will probably add 25% headcount this year. It doesn’t happen that way. Salesforce is back to hiring.

Sales Hiring 278

Sales Hiring SaaS Headcount Compensation 278

SaaStr

JUNE 13, 2020

And they have five times the headcount and have raised $25 million. Net Negative Churn is an awesome force. That the operational part would get harder before it got easier … but it would get easier once he doubled or so, when he’d finally have some redundancy and fat on the team and the model. More on that here ).

Sales Hiring 353

Sales Hiring Scale Headcount SaaS 353

SaaStr

OCTOBER 20, 2020

A mediocre CSM might say retain 100% of your mid-market revenue on a net-of-churn basis. No headcount limits. A lot of mature SaaS companies use the metric of ~$2m in ARR per customer success rep. But if you get a great team — you can hire a lot more aggressively than that. I didn’t figure this out until $4m in ARR.

Sales Hiring 341

Sales Hiring Headcount Engineering Banking 341

Intercom, Inc.

AUGUST 23, 2022

With increasing business costs and reduced headcount, companies are feeling the squeeze as they also grapple with rising consumer expectations. While a 1% increase in acquisition might boost your bottom line by about 3% , a 1% decrease in churn can boost it by 7% ! It’s more significant than you might think….

Customer Support 211

Customer Support Retention Headcount Customer Lifetime Value 211

Tom Tunguz

JULY 21, 2022

Management teams expect to reduce operating expense by 20% predominantly through headcount reductions or hiring freezes - everyone from sardine startups to public megalodons. Software automates manual work, provides leverage, and the total cost is often less than a headcount. Software does more with less.

Sales Hiring 182

Sales Hiring Headcount Software Finance 182

SaaStr

NOVEMBER 27, 2021

At $2m in ARR, budget $200k in headcount for the CSM positions + support. Second, measure Client Success on “net churn”, or total revenue from the customers under management by Client Success. A typical target is 110-120% net annual revenue growth rate from your base, including both churn and upsells. Measure both.

Sales Hiring 246

Sales Hiring Customer Success Scale Customer Lifetime Value 246

SaaStr

NOVEMBER 27, 2021

At $2m in ARR, budget $200k in headcount for the CSM positions + support. Second, measure Client Success on “net churn”, or total revenue from the customers under management by Client Success. A typical target is 110-120% net annual revenue growth rate from your base, including both churn and upsells. Measure both.

Sales Hiring 245

Sales Hiring Customer Success Scale Customer Lifetime Value 245

SaaStr

MARCH 20, 2024

Do you have to double your headcount to make it from $10M to $20M or even $2M to $5M? For headcount specifically, make sure that the constraint to growing faster is that you don’t have enough salespeople to work the demand that exists for your business. When those outcomes are achieved, the hire gets their headcount.

Sales Hiring 294

Sales Hiring Sales Recruiting Scale Headcount 294

SaaStr

SEPTEMBER 3, 2023

By freezing headcount for a year. Mathematically, if you keep the headcount flat and continue growing 50% like Monday or 30% at $2B like Hubspot, you get wildly more efficient. Conversely, we’re better at instrumentation and can do cohort analysis of our customers and why they churn. Hubspot and Salesforce did the same thing.

Sales Hiring 268

Sales Hiring Headcount Finance Technical Review 268

SaaStr

MARCH 20, 2023

Some define it by headcount, typically around 200-2000 employees, and others by revenue, generally $10M to $1B annual recurring revenue. In rapidly growing companies, the headcount can go from 500-3000 in a matter of months. For some, it may be user adoption or reducing churn. They’ll think it’s them. And, in reality, it’s not.

Scale 243

Scale Enterprise Scaling SMB 243

The Angel VC

JUNE 25, 2015

An exception are SaaS startups with a no/low-touch sales model and viral growth (see above) and potentially companies which have a massively negative net MRR churn rate and therefore don't have to acquire as many new customers. Input your monthly net MRR churn rate (i.e. click for a larger version).

Sales Hiring 185

Sales Hiring Sales Recruiting Scale Headcount 185

SaaStr

AUGUST 13, 2021

You need a baked financial model, that includes sales and marketing costs, scaling over time, headcount, and comparison to comps, and when you’ll need the next round(s). Know and Share Your Churn and NRR. Hiring churn doesn’t help. Both bottoms up and tops down. Every public SaaS company now shares its NRR.

Scale 286

Scale Sales Hiring Venture Capital Headcount 286

SaaStr

OCTOBER 18, 2019

The real magic from a Wall Street perspective isn’t that Salesforce is “SaaS” and much of, say, Oracle still mostly isn’t … it’s that Salesforce’s revenue, with net negative churn, completely recurs every year. With precise headcount and budget needs. How many reps. How many SDRs.

Sales Hiring 240

Sales Hiring Scale Headcount Revenue 240

SaaStr

FEBRUARY 11, 2021

Because sales is a lead-driven but headcount- closed business. OK, adding in churn, you’re going to have to add another >$1m+ ARR … quickly. Top-line revenue, inclusive of churn, inclusive of upsells and self-service, net of everything. And the great VP of Sales all know this. Backfilling and Helping His/Her Sales Team.

Sales Hiring 363

Sales Hiring Scale Sales Recruiting Sales 363

SaaStr

JANUARY 12, 2024

Now, in 2024, we’re in the age of efficiencies, and we’re rethinking whether we should put more people on it or tolerate more churn and issues because we want to be cash flow positive. Of course, this can go too far sometimes if you push the customer and sales team, and customers don’t get value, they’ll churn.

Sales Hiring 315

Sales Hiring Customer Success Scale AI 315

Intercom, Inc.

DECEMBER 8, 2020

It can also guide your hiring process if increasing headcount is required to guarantee 24/7 coverage for customers. A disconnect between your tickets opened and tickets completed may indicate a need for better training of support reps, increased headcount, or the introduction of automation to help reduce the strain on your team.

Customer Support 211

Customer Support Metrics Technical Review Scale 211

SaaStr

JULY 24, 2023

Folks pulled usage down as much as they could to save money, although logo churn remained low. They kept the headcount kind of flat. Even with MongoDB’s epic growth, 2022 saw a big slowdown in usage growth. And when you have partial utility-based pricing like MongoDB does, you see the impact fast. But last quarter saw a bounce back.

Revenue 245

Revenue Scale Sales Hiring Cloud 245

The Angel VC

MARCH 22, 2012

Therefore the key drivers of my imaginary startup are organic growth rate, marketing budget and customer acquisition costs, conversion rate, ARPU and churn rate. If you have a SaaS startup with a higher-touch sales model where revenue growth is largely driven by sales headcount, the plan needs to be modified accordingly.

Startup 189

Startup SaaS Payments Payment Methods Payment Solutions 189

Intercom, Inc.

JUNE 3, 2021

” I think the “Sure thing boss, give me more headcount” is obvious. If you’re a SaaS company, that could be new customer acquisition, it could be an expansion or even reduce contraction, reduce churn. ” It’ll reduce our churn, potentially increase expansion. That’s one category.

Strategy 228

Strategy Software Review Development Team Review Sales Recruiting 228

Intercom, Inc.

DECEMBER 2, 2019

How do you ensure a great customer experience globally without adding a ton of headcount? Offering multilingual support doesn’t just drive CSAT scores, it can even impact churn. For online businesses, our customers can come from any part of the world and at any time. Here are our key findings: 1.

Scale 209

Scale Outsourcing Services Scaling Technical Review 209

The Angel VC

NOVEMBER 23, 2016

Sales Team Hiring Plan This tool helps you find out how many sales people you need to hire in 2017 based on your growth targets and other import inputs such as your MRR churn rate, your sales team's quota, ramp-up times, etc. You can easily adjust this to a different growth path by changing row 22 accordingly.

Sales Hiring 141

Sales Hiring Point of Sale Headcount SaaS 141

SaaSX

FEBRUARY 5, 2020

This INCLUDES headcount-related expenses. If you are utilizing Gusto or a similar payroll tool, your headcount expenses are likely coming into your P&L as one (or maybe two) line item(s). these figures are going to be WRONG because you haven’t properly accounted for your headcount costs in Sales & Marketing.

Finance 118

Finance Sales Hiring Headcount Scale 118

Intercom, Inc.

NOVEMBER 14, 2018

. “The point of tracking sales KPIs is to drive action for our team, not just to display them on a sales dashboard” That’s why I spend much of my time examining underlying KPIs like lead flow, pipeline creation, churn, expansion and more. Churn dollars. Gross customer churn. New logos acquired. New logo revenue.

Sales Hiring 188

Sales Hiring Metrics Revenue Sales 188

Intercom, Inc.

JULY 27, 2022

As companies and their headcounts grow, so do their tech stacks. Integrations with product analytics tools like Amplitude make it easier to understand and measure the impact of customer interactions in Intercom, helping to increase revenue and reduce churn.

Enterprise 205

Enterprise Headcount Engineering Cloud 205

Intercom, Inc.

AUGUST 26, 2020

With more than half (52%) of companies planning to reduce the size of their team as a result of the current economic downturn, support leaders are turning to technology, not headcount, to scale their efforts. It’s also a crucial leading indicator of future churn and customer retention.

Trends 233

Trends Scale Headcount Technology 233

ChurnZero

JANUARY 17, 2025

When your CFO doesnt see the direct link between customer success and the financial metrics they track, its harder to persuade them to invest in CSwhich can ultimately lead to preventable churn. Gross Revenue Retention (GRR) m easure the recurring revenue retained from existing customers, excluding upsells but accounting for churn.

Customer Success 52

Customer Success Benchmarks Headcount Scale 52

Clouded Judgement

MARCH 22, 2024

At contract expiration these customers either renew (sign another contract with same annual value), expand (sign another contract with higher annual value), contract (sign another contract with lower annual value), or churn (stop being a customer and spend goes to zero). Do you have ARR or ERR?

AI 190

AI Cloud Revenue Technical Advisors 190

Tom Tunguz

MAY 14, 2014

In addition to mitigating churn, CS teams increase account revenue, which in many SaaS companies, can grow to be multiples of the first year’s customer value. Customer success teams must justify the investment of building a CS team, often at the expense of headcount in another team. This can be a long process.

Customer Success 100

Customer Success Startup Headcount Sales Hiring 100

Intercom, Inc.

MARCH 12, 2019

” In our case, a resounding “yes” required seeing a positive impact on customer expansion and one big enough to justify the fully-loaded cost for the additional headcount. We tracked customer churn, contraction, expansion and overall health, and correlated the metrics to our relationship managers’ activities.

Sales Hiring 171

Sales Hiring Sales Recruiting Underperforming Technical Team Scale 171

Valuize Consulting

DECEMBER 17, 2024

Establishing effective yet efficient ratios requires aligning your CSM headcount with the mechanics of your customer lifecycle design including the definition of the CSM role in your company and the specific activities that achieve successful product adoption with your customers.

Technical Review 52

Technical Review Systems Review Headcount Scale 52

SaaStr

OCTOBER 17, 2023

Headcount maybe goes from 2 or 4 to 10. They’re fully saturated unless customers churn. This is generally where churn starts to pick up because competitors are selling against you. When one person churns, it counts for more. Customer Success You do this to create capacity. The CSM role looks different than other roles.

Scale 169

Scale Sales Hiring Customer Success Scaling 169