GTM Metric 3a: NEW Billings/S&M Expense

I read a good report from Barclays today (“The Expense of Driving Billings,” Oct 28, 2016). This is a follow up to my prior blog post which uses Total Billings/S&M expense to assess GTM productivity.

GTM Metric #3: Is my Go-To-Market productivity good enough?

The Barclays’ report focuses on the sales and marketing productivity of New Billings (ie, New Billings/S&M expense). We know:

New Billings = Total Billings — Renewals

Barclays calculated Renewals by multiplying the renewal opportunity by the renewal rate and assumed that renewals required minimal sales and marketing effort (which is not always the right assumption). Barclays then prepared this table, which shows the S&M productivity of new billings:

According to the table, Cornerstone generated $0.56 in new billings for every $1.00 spent on sales and marketing. In contrast, Workday generated $1.15 in new billings.

Barclays also shows the new billing acquisition rising with growth.

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