Every Story Has a Number. Every Number Has a Story

This insightful statement by Aswath Damodaran, professor of valuation & finance at NYU Stern School of Business, is a powerful reminder that numbers, in any analytical domain, hold deeper meaning beyond their face value. They are the quantifiable evidence of underlying stories, behaviors, and trends. Conversely, stories give context and direction to the numbers, helping us derive actionable insights. While Damodaran uses this concept to teach the valuation of companies, the philosophy translates seamlessly into B2B marketing operations, where metrics are vital, but understanding their implications is crucial for driving business success.

In B2B marketing, intertwining numbers and stories is fundamental to building strategies that align with business objectives, execute efficiently, and scale effectively. To illustrate this, we will explore the philosophy and processes that enable marketing organizations to marry stories and numbers and how this dynamic has evolved in the SaaS era.

# 1. The Philosophy: Marrying 'Numbers' and 'Stories' in Marketing

The essence of combining numbers and stories is rooted in clarity and direction. Numbers quantify outcomes—revenue, leads, churn rates, customer acquisition costs (CAC)—and provide a pulse check on marketing effectiveness. However, without the story behind these numbers, they are incomplete. The story explains why something is happening, what needs attention, and how successful tactics can be replicated or scaled.

B2B marketing, at its core, must align closely with business objectives—whether it’s driving revenue, improving lead quality, or increasing customer retention. Stories complete the picture by revealing why specific tactics succeed, why others fail, and how the business can optimize for better results. For example, a rising Customer Acquisition Cost (CAC) paired with stagnant revenue growth tells a different story from a rising CAC coupled with improving Customer LifeTime Value (CLTV). The former suggests inefficiencies, while the latter indicates a profitable customer base.

This philosophy empowers marketing teams to prioritize actions based on quantitative evidence and qualitative insights, allowing for better resource allocation and more refined strategies. The interplay between numbers and stories guides decision-making, ensuring that marketing actions contribute meaningfully to overarching business goals.

# 2. The Story: Process of Tracking Metrics and Reporting

Integrating numbers and stories in B2B marketing follows a systematic approach, where each step builds toward creating actionable insights. The graphic below illustrates the four-step process for analytics planning: Plan, Collect, Analyze, and Report, focusing on tying metrics back to the business objectives.

Planning and Collecting Data

The first step, Plan, establishes the marketing campaign’s singular objective. This could be revenue growth, customer retention, or lead generation. Once the objective is set, fundamental questions are framed around what to measure, how it will be measured, and why these metrics matter in achieving the overarching business goals.

The Collect phase involves locating the right data sources, deploying data mining tools, and addressing potential data quality concerns. This is where marketing and analytics teams must select the right key performance indicators (KPIs) that align with business goals. Standard metrics in B2B marketing might include CAC, conversion rates, CLTV, and sales velocity.

Analyzing and Reporting: What, How, Why

The Analyze and Report steps focus on deriving meaning from the data. Here, the “What, How, Why” framework becomes crucial:

"What": Identify what happened. For example, did lead generation increase or decrease? What was the CAC or churn rate?

"How": Explain how it happened. Were there specific campaigns or product offerings that led to this result? Did customer behavior shift?

"Why": Uncover why it happened. Was there a change in customer preferences, economic conditions, or marketing tactics? Understanding this helps inform future decisions.

Example: HubSpot Conversion Rates

Consider HubSpot’s impressive 15% conversion rate on landing pages, compared to the industry average of 2-6%.

What happened? HubSpot’s conversion rates outpaced the competition.

How did it happen? Their marketing funnel is finely tuned, with optimized messaging and lead nurturing.

Why does it matter? A conversion rate this high indicates the brand’s ability to resonate deeply with its target audience, providing valuable lessons on the importance of segmentation and content relevancy.

Illustrating the Framework with Metrics

Let's take a more detailed example from the SaaS landscape:

Customer Acquisition Cost (CAC)

The Number: Salesforce’s CAC was estimated at $2,500 in 2020.

- What: Salesforce successfully acquires customers at this cost.

- How: By optimizing lead generation and targeting higher-value clients, Salesforce maintains a sustainable CAC-to-CLTV ratio (1:6).

- Why: This efficiency indicates solid sales and marketing alignment, but if CAC rises without increasing CLTV, it might signal an inefficiency, potentially requiring adjustments to marketing spend or customer targeting.

This storytelling framework allows organizations to transform seemingly static numbers into actionable narratives, guiding future strategies.

# 3. Evolving Metrics in the SaaS Era: New Measures of Success

In the SaaS era, the metrics landscape for B2B marketing has shifted. Traditional metrics like lead volume and website clicks are giving way to more nuanced and meaningful indicators of business health. Metrics such as churn rates, revenue per employee, and customer retention rates are increasingly vital in determining the effectiveness of SaaS models, where recurring revenue and customer loyalty are critical for long-term success.

Numbers That Define SaaS Marketing

#1 Sales Velocity and Revenue Growth

One of the most telling metrics in the SaaS world is sales velocity, which reflects how quickly a company turns prospects into paying customers. Snowflake’s 58% year-over-year revenue growth in its 2020 S-1 filing highlights an optimized Go-To-Market (GTM) strategy, with strong product-market fit and sales execution. The what is clear—high velocity led to rapid growth. The how is tied to streamlined processes and effective sales enablement. The why underscores the importance of operational efficiency in rapidly scaling a SaaS business.

#2 Customer Churn and Lifetime Value

In SaaS, customer retention is as important as acquisition. Slack’s <10% churn rate and high net retention (130%) demonstrate effective post-sale engagement strategies. The what is Slack’s ability to retain customers. The how focuses on their customer success initiatives. The why reflects their long-term value proposition, where ongoing engagement is critical to sustaining growth.

#3 Revenue-per-Employee

A modern efficiency metric is revenue-per-employee, a reflection of operational scalability. Shopify’s $593,000 per employee in 2020 signals a well-oiled operation capable of scaling without significantly increasing headcount. The what shows remarkable productivity. The how is the automation and streamlined processes Shopify has adopted. The why indicates that such operational efficiency allows Shopify to maintain profitability even as it grows.

Conclusion: Numbers and Stories in Tandem

In B2B marketing, SaaS operations, and GTM strategies, numbers and stories are inseparable. Every metric tells a story, and every story helps shape future business strategies. Whether it's understanding CAC, churn rate, or sales velocity, the fusion of data and narrative ensures that marketing efforts remain aligned with business goals and deliver long-term, scalable results.

The philosophy of "every number has a story, and every story has a number" serves as a guiding principle for B2B marketing teams. By mastering both, businesses can harness data to drive meaningful, strategic growth in a competitive landscape.

Feel free to comment on this philosophy and how it works in your business.

# Bibliography

1. Salesforce Customer Acquisition Cost (CAC): CB Insights: [Salesforce Financial Analysis](https://www.cbinsights.com/).

2. Salesforce Customer Lifetime Value (CLTV):Salesforce Investor Relations: [Salesforce 2020 Report](https://investor.salesforce.com/).

3. HubSpot Conversion Rates: HubSpot Marketing Stats: [Conversion Rates by Industry (https://www.hubspot.com/marketing-statistics).

4. B2B Conversion Benchmarks: Smart Insights: [B2B Conversion Rates and Benchmarks](https://www.smartinsights.com/).

5. Microsoft Azure Customer Lifetime Value (CLTV): Synergy Research Group: [Cloud Market Analysis](https://www.srgresearch.com/).

6. Snowflake Sales Velocity and Revenue Growth: SEC S-1 Filing: [Snowflake S-1 Filing](https://www.sec.gov/Archives/edgar/data/1640147/000164014720000003/snowflake-s1.pdf).

7. Slack Churn Rate: TechCrunch: [Slack Retention and Churn Rate](https://techcrunch.com/).

8. Zoom Revenue Growth: CNBC: [Zoom Q4 2020 Results](https://www.cnbc.com/).

9. Netflix Forecasting: Variety: [Netflix Subscriber Growth Miss](https://variety.com/).

10. Workday Sales and Marketing Cost: Workday Investor Relations: [Workday Annual Report](https://www.workday.com/).

11. Shopify Revenue-per-Employee: The Motley Fool: [Shopify Financial Performance](https://www.fool.com/).

These references provide the publicly available data points and financial insights used to substantiate the blog's analysis of key B2B marketing metrics and trends.