GONG's 2025 State of Revenue Growth Report

Live from Schenectady, New York, it's SaaS Talk with the Metrics Brothers, Growth and CAC.

And I'm Growth, better known as Ray Reich, founder and CEO of Benchmarkit.

And I'm CAC, better known as Dave Kellogg, EIR at Balderson Capital. independent consultant, and the author of Kellogg.

And together we are the Metrics Brothers.

And we go together like deal closes and bell rings, Ray.

Ah, the old revenue bell. We used to use them all the time, Dave.

That's right. Ray grew up in sales. I grew up in marketing. Ray grew up in sales. One of our great differences. Look, but at my last company where I was CEO, we had the AEs ring it. I bought a nautical bell. And we put it outside the finance guy's office. And after the deal was booked, finance gave the thumbs up, the reps would come ring the bell, but they literally kept tearing it off the wall. So, we had to switch it to have the finance guy ring the bell so he wouldn't tear it off the wall.

Finance ringing a closed bell? No, Dave, tell me it ain't true.

Yeah. Yeah. Sales didn't like it, but I didn't like all the repair fees.

Now, the bell ring is a great sales tradition, probably Lived through it for 25 years. But in 2014, we had a company and we actually moved to using a gong and a mallet. And then surprisingly enough, a few years later, there was actually a Super Bowl ad that Gong did that actually displayed the use of gong, a gong to celebrate wins. And of course, conversational intelligence in their case.

Indeed. Not one of their finer moments, if I recall. It's one of those ads I try to block out. But in any case, Ray, since we're talking about gongs, I thought the inspiration for today's episode would be Gong and specifically their 2025 State of Revenue report, which they recently put out.

That sounds great. Of course, this is probably something I could talk about all day long. But before that, let's hear a word from our sponsor. The Metrics Brothers is proudly sponsored by Benchmarkit, the B2B AI and software industry's largest, broadest, and most contextualized benchmarking index. Dave Kellogg and Ray Groth Wright have put the Metrics Brothers Podcast on hiatus for remainder of 2026. All episodes we have ever recorded are still available on your favorite podcasting app. You can reach Dave at Kellogg and Ray on LinkedIn at Ray Reich. Thank you so much for listening to the Metrics Brothers Podcast.

Okay, Ray. Well, today, look, I'd like to do a slide-by-slide march through this report. Uh, it's called State of Revenue Growth 2025. It's from Gong and Gong Labs. And, uh, we're just going to march through it. There's a lot of good stuff in here. It's worth reading. Uh, we're going to make the episode work whether you have it in front of you or not. But if you do have it in front of you, I will throw references to slide numbers so you'll be able to follow right along. So, let's jump right in, Ray, with slide 4, which provides background on the survey. This is an interesting survey because it's not just a survey. This report has 2 things in one. One, it is a survey of 617 global revenue leaders plus analysis of their data, right? Think of all the data Gong has on sales calls. So, they say they're analyzing 1.3 million sales opportunities and 42 million sales interactions from 811 companies.

Wow!

So there's a ton of data behind this report.

In fact, Dave, I've been following Gong Labs for about 5 years and just the amount of sales interaction data they have. I mean, they can even tell you interesting things like the tone of a comment and whether a deal is going to close or not. But great data they have. I totally agree.

Yeah. You know, I haven't seen their data as much, but for a long time, I remember they published a talk-to-listen ratio, like what is the ideal answer? I think it was really 53-47 or Maybe 5,743, but they had some number and I like their stuff. You know, the other company that's producing a lot of great data, there's only 2 companies I know of, by the way, Carta, who's producing an enormous amount of great data on cap tables, options, comp, equity, financing rounds, and Gong. So, it'd be nice to see more SaaS companies doing this, but we'll talk about Carta another day. Let's jump in here on this survey, slide 5, back to growth in 2024.

Yeah.

And the takeaways on this slide are first, companies are growing faster on average. Their mean, or mean I think, is 19% up from 11%. Sales velocity is accelerating. We're going to break that down in a minute. But basically, people have more opties. The opties are bigger. And the sales cycle length is roughly flat. We'll come back to this. And then, 48% hit their quota in the most recent period. And I hate that language, Ray, because there's a massive difference between hitting your quota in a quarter or a year. Right. Very few companies, particularly in enterprise, like almost nobody makes their quota every quarter, but a lot of people make their quota on the year. So whenever, whenever people go 48% made it the most recent period, I'm hoping that means quarters. By the way, the low number, the 48 there, makes me think it means quarter, but I wish they'd be a little clearer on that. Thoughts on this slide, Ray?

A couple things. Number one, I'm not a big fan when people use benchmarks that are averages because this is the average growth rate. I really do like to see the median than the 75th and 25th percentile. So just a reader beware, it's average versus median. The second thing is, and I've seen this for a long time, Dave, I call it that messy middle. And that is the lowest growth rates are for those companies in the $11 million up to $50 million. And their research shows the same things. It's the lowest growth rate of any company under $250 million. And then I agree with you, not only the period, because when they did this survey, I'm guessing it's an assumption, Dave, that is probably Q3 '24 data.

Yeah.

But I still have a real concern when I'm seeing all this data from RepView, from Gong, from exactly that less than 50% of account executives out there are hitting quota. That tells me we have too many AEs in this industry.

Yeah, I draw a different conclusion, Ray. To me, if you told me 48% on the year in an enterprise company, I'd agree with you. If you tell me 45% in a quarter in an enterprise company, I don't agree with you. Because we both know it's certainly possible to hit your number on the year. You know, good Q1, bad Q2, medium Q3, great Q4, right? It happens all the time, which is why I really am very careful whenever people talk about attainment. I always want to know over what time frame, because companies go, oh, we've got 80% and 80%. Well, it's like, okay, on the year, that's actually quite good, by the way. And I would argue on a, you know, on a monthly basis, that'd be nearly impossible. And I should add, Ray, on this, period could also mean month. And I think they're probably using period on purpose, but they should have given us some clue, to your point, as to when and also as to what duration it is. Because basically, the shorter the period, The harder it is to make your number every period.

Totally aligned.

All right. Slide 6, sales velocity. You know, Ray, I was surprised because, as readers may know or listeners may know, we do a lot of single metric episodes, which I like quite a bit, where we just talk about the CAC ratio or CAC payback period or ending ARR growth, or I don't know, we talk about a metric. And we've never done a single metric episode on sales velocity. So, my first realization was, gosh, Ray, we should do an episode on this. Now, despite that, we'll talk about it a little bit here today. And what sales velocity is, it's a fun metric. A lot of people in sales use it. At least, you hear about it. And it's defined as number of opt-ins times ASP times win percentage divided by sales cycle length. Now, a couple important things about that metric. One, the first question is, for what? I've always done it for the whole company, although in this report, they're actually going to do it for rep. They're going to do it on a per-rep basis. The other interesting thing, anyone who's kind of a physicist will know, the first thing you check on any metric is what are the units, right? And if you look at the units of this, opt-ins is count, deal size is dollars, win rate is a percent, and sales cycle length is days. So, it's basically dollars per day is what the unit is for sales velocity. And it's pretty simple math. Before I drill in more to this, Ray, any comments?

No, I will just say I never used it running sales organizations, but there's a couple of the components that I really leaned upon. But I think we'll talk about that in a while.

Okay. Yeah, I think both Ray and I would say that we've both focused a ton on the elements of this. Opties or opties per rep, average deal cycle or ASP, average sales price I call it. Some call it average deal size, ADS, but ASP. win percentage, and sales cycle length. I mean, we always focus on the elements of this, but in point of fact, Ray, I have never used this with a customer engagement, not once. And I never— I have also never calculated it at a company where I was CEO. So I don't know if I'm an outlier, but are you the same way?

Dave, I was a head of sales in 6 companies and I never once used it as one of my top-level metrics.

So this might be one of these kind of consulting or VC metrics. But anyway, it's good for people to know about it so they don't get blindsided one day when people talk about it. Let me explain some basics of this metric. Because of the math, the gains basically compound. And I'm just going to walk through a quick example. Imagine you have 100 optees. They have a $50K deal size, a 20% win rate, and a 100-day sales cycle. That velocity will work out to be $10,000 a day. And what you do, if you make 20% perturbations to each element, like you say, oh, everything else is equal, but 120 ops, well, then you get $12K sales per day. So, a 20% improvement. Ditto for if you take the ASP up from 50 to 60 and hold everything else constant. Now, these things compound. So, if you say, wait, instead of 100 ops, there's 120, and instead of $50K ASP, there's $60K, then velocity goes up to 14.4. So, it's basically 1.2 squared, right? It is a 44% increase. And that's the kind of seductive thing about velocity as a metric, which is these deltas compound. The last example would be same thing holds for win rate. If you knock that up by 20% from 20 to 24, again, you get a 20% increase in velocity, $12K. And the real kind of seductive thing is if everything gets a 20% boost. So, we take opties from 100 to 120, ASP from 50 to 60, win rate from 20 to 24, and sales cycle down to 83. Then you get all those numbers compound and you get 108% increase. You get $20.8K. in terms of dollars per day. So people love this metric for that. In my mind, that's the property they love, this kind of seductive notion that if you make these little perturbations, you can get this massive win.

Yeah, the only thing I'll say, and it's a lot of numbers you just shared, Dave, that when the 2 things that I focused on most, which I mentioned, were the average selling price or the average ACV for a new deal and the close rate Because taking the baseline that you talked about, and if I just improve the ASP from 50% to 60% and the win rate from 20% to 24%, I have a 44% increase in sales velocity. So, all I'm going to say is win rate and ACV are in my sweet spot.

Yeah, those are— I mean, look, if we had to— I mean, it always varies by company, but if you said, well, to me it varies too much by company, right? Some companies I work with are short on pipeline. So, you got to get the opties up. So, look, I think one of the ones most managers miss is win rate. They kind of accept it as a given. And it's like, no, no, no, no, we can control that. ASP, most people know they can control it. They try and drive it up through reducing discounting, which isn't a great way to do it in my mind. Or they'll try and drive it up through add-on products, which is a better way to do it in my mind. And then, sales cycle length, that's the one that I think is kind of hard to move. There's things you can do, but boy, of all these levers, that's not the first one I'd go to if I needed quick wins.

Okay. I have to tell you a little trick that I used to do when I first went into a company, and I'll get your CEO feedback. We always looked at stage 2 to closed won, right? That was kind of where we got win rate. So I made it a hell of a lot harder to get to a stage 2. I wanted more highly qualified opportunities in stage 2 so I could take my win rate from 20 to 25% over a matter of 1 to 2 quarters. And it automatically gave the sales organization and the CEO more confidence in our ability to win. What do you think of that?

So, we're gonna have the episode on gaming metrics for the board next week, right? No, in reality, I'm not sure if you shorten the sales cycle or just improve the metric by changing the starting line. And there are some semantics associated with that. If we're trying to get more productivity, we actually have to shorten the cycle from beginning to end. But I do think it is— look, if you're looking for a more meaningful metric, Sometimes sellers park stuff in stage 1. There's not a lot of discipline around stage 1 opportunities because sometimes they're excluded from pipeline scrubs. So, you know, in a perfect world, you don't do what you just said, Ray. But in a practical world, there's actually a pretty strong— look, I know some companies go even further. They go stage 4 to close, right? They say, ah, it's not real till it's a demo. And I think that's too much of a good thing. I personally do a lot of metrics off stage 2, but I try not to let stage 1 become a dumping ground. I scrub it anyway.

Yeah. And I didn't even hit here, what is win rate? Because that's an episode we've already done because win rate's often calculated incorrectly.

And it's not the same thing as a close rate. And there's multiple different win rates, narrow versus broad. I'll do some quick Kellogg plugs. There's a post on that, win rate versus close rate. There's also a post, a lesser seen post, uh, on something we talked about above called Lessons from Playing with the Simple Quota Attainment Model. And that actually demonstrates quite viscerally the difference between hitting quota every month or every quarter and hitting it every year. So, play around with that. If that conversation was confusing, go look there. Now, Ray, let's cut to the chase here on velocity data from Gong. They're basically saying, we're gonna look at each element of velocity, that opties have gone up to 54 per rep from 48. First, I gotta ask you a question, Ray. You're the guy who's the sales manager. A rep is carrying 54 opties in their pipeline. What do you think?

How are they focusing? And it must be smaller ACV. That's not focus. It's not.

Yeah, it's a giant red flag to me. That's insanity. I mean, to me, 20 is where I start saying we got to hire more reps or we got to clean the crap out of the pipeline. But in my mind, simply put, there's no way a rep can manage 54 opportunities and be calling people back and moving deals forward. So somehow they came, and I'm not sure how, we won't try to explain it. They are saying that your average rep now in their study was— not their study, this is actually the Gong Alliance data— is carrying 54 opties. Up from— up 13% from 48.

Hey, Dave, I have to ask you, because a lot of my clients in 2024, creating pipeline was the number one challenge for their go-to-market teams. And to say that people are increasing the number of qualified opportunities, I— to me, I question that. What do you think?

Well, I question the whole thing because 54 is a ludicrous number. And I do agree that last year has been a tough pipeline creation environment, at least companies I work with, are actually trying to raise the bar to get the crap out. So, I wouldn't have been surprised if opties went down, but they were, you know, close rate went up commensurately. But okay, next element of sales velocity, win rate. They're saying that win rates are up from, what is it, 22% to 25%. And specifically in enterprise, it's up from 24% to 30%. So, these are healthy win rates.

Yeah.

Again, not sure how they're calculating it. I don't think I saw a definition anywhere, but we're not going to go down that rabbit hole right now. They're saying people are winning slightly more. I'm going to do the next 2, Ray, and then I'll weigh back into you. They're saying deal sizes are up a modest amount to $96K. So, up 6% to $96K is the average. So, this does tell you about who their sample is and who they work with, right? Again, this is Gong Labs data. So, it's not their sample. It's who they work with. And your average Gong customer, it appears, has a pretty big average deal size of $96K. And then finally, they say sales cycles are roughly flat at 69 days, which again, it tells you a little bit about the market, but it also tells you about who's using Gong. And net-net, well, amazingly, Ray, they never actually do all the math. They give you each 4 elements of velocity, but they never calculate it. So I did. And on a per rep basis, velocity works out to $19 kilodollars per day in 2024 versus $13.9 in 2023. So you take all those little deltas and we've got a 30%, 37% increase in sales velocity. Thoughts?

Well, the first thing, when I looked at all these stats from Gong Labs, I'm like, well, I guess you have to buy Gong if you want to increase your performance. But then when I really kind of tried to Peel back this onion. Dave, an average deal size of $96,800 and an average sell cycle of 68 days doesn't resonate with me. Most $100K type deals, you're going to see more of a 90 to 120, maybe 150-day cycle, especially with buying committees, what they were in 2024. So this data is, to me, seems like the best of Interesting, Ray.

Yeah, that's a really good point. Do those 2 really go together? Because that's a pretty big ASP for a 69-day sales cycle. It begs a ton of questions about where are they measuring it from, et cetera. And the problem with Gong is they're not going to have the liberty of defining that. It's however their customers do, right? If you just think of each customer, whatever they do, because I guarantee you that not all Gong customers define stage 2 differently. They don't define an opportunity. Sorry, they don't all define the same. They don't define opties the same. So if you're Gong, you're aggregating this data. But unlike, say, in a survey where you can say, here's what I want you to answer, right? Measure it from when it's accepted by sales or measure it from when it gets a dollar value or measure it from a demo. Here, they can just look in their data and say, oh, how many opties were there? In some sense, we're aggregating opties, but God knows what an optie is. So, I think that could be a source of noise as well. But I do think a good eagle eye there, Ray, that if you cross-check those 2 numbers, it does raise some questions.

It's almost like I ran sales for a while.

Yeah. Yeah. Who'd have thunk? Who'd have thunk? You're not a rogue accountant despite the GE background. You're not a process guy either. So, slide 9, top growth initiatives. I thought this one was interesting. This is survey data. So, in order, number 1, driving expansion in existing customers, top growth initiative in their survey. Number 2, expanding into new geos, industries, and segments. Number 3, new products and services. Number 4, increased productivity. And number 5, sell to new buyers and personas. Any comments or thoughts on these initiatives that came back from their survey?

Well, first of all, I need to apologize to my Green Belt process instructor at GE. She's going to be rolling over in her bed right now saying that I'm not a process guy.

Well, I've always imagined you as a process guy, right? Just to be clear. Yeah.

So here's the thing that jumped out at me. And with 65% of companies saying that upsell and cross-sell is gonna be a key growth initiative, I implore people to know how much you're investing in every dollar of expansion ARR. And I know that you and I don't always see aligned on this expansion CAC ratio. That's how much sales, marketing, and customer success investments being made to expand existing customers.

Yeah.

That ratio went up 40% in 2024 versus 2023. So if you're going to focus on existing customer growth, run that expansion opportunity process like a new customer acquisition, measure it and understand the efficiency.

That's a big difference. And that 40% raise coming from your survey, Iconiq, this, where's it coming from?

Thank you. That was from the Benchmarkit 2024 survey with a population of 936. However, only 80 people measured expansion CAC ratio.

Okay. So, a plea from Ray that if you're in the group that has made your top growth initiative expansion ARR, then please measure the associated CAC.

And one other thing, Dave. When you try to increase your target addressable market, your TAM, by going into a new geography or a new industry, the same thing. Don't let your CAC payback period or CAC ratio changes be understood without segmenting it for the old ICP versus that new segment. Very important to understand how it impacts the overall efficiency.

So, 2 points there, Ray. One, I don't think it changes the TAM. I think it changes the SAM, the service available market, right? I think by my definition, the TAM is everywhere. But your point is if you're not in Europe, then you can't sell to people in Europe. So, for all practical purposes, they're not in your market. I think that's called SAM. I'm not a big SAM TAM MAM freak, but we could do an episode on that one day. It could be a fun thing to explore because particularly in fundraising decks, you'll see the concentric circles of the various XAMs. That was the first point. Second point. Oh gosh, I forgot it. You said 2 things.

It was about expansion CAC ratio that I said.

Expansion CAC ratio. Very much so. You're saying that the— basically what I heard was don't blend the extraordinarily high CAC you're going to have in the first few months with Europe into your US CAC. I mean, ultimately you can produce a number that's a single CAC, but it's going to be off because your US will presumably be fairly efficient at this point, but your Europe's going to be super inefficient and you're going to get a kind of a weird number. So, Ray is saying segment it. This is back to another blog post I've done a long time ago about what I call same-store sales, which is, I don't know why more software companies don't think about same-store sales because with Starbucks, if you look at their growth, They're looking at 2 things. How much did we get from new stores? And how much did the same stores, the ones that were open a year ago, how much did their productivity improve year over year? And we should really think about sales reps the same way. Once you're ramped, you're now a same store. So, we should analyze all the same store reps, right? How did the same store sales, what were the same rep sales? How do they look year over year? And then, how the new rep sales look. But we can do that one later. Plus, Ray, I'm now back to the place in Riverside where I can't see the timer anymore. So I have no idea how much time we have left for the episode.

We should wrap up in 2 to 3 minutes if possible.

Okay, fair enough. Thanks for the clue. Okay, so we did growth initiatives. Let's talk about slide 12. We're going to blast through 3 more slides here. Slide 12 is talking about AI adoption. The survey data to me was interesting. So 3/4 of revenue teams plan to use AI in 2025. I'm surprised that's more like Not 90, but anyway, 46% yes for sure today or already, 24% no, not right now, but plan to in 2025. And somewhat shockingly, lemming, not lemmings, what are they called? Ostriches? I guess 27, Luddites, there we go. 27% say no. And to me, this is just plain crazy. I'm gonna do another plug here. My friend Paul Stanczyk at Parker Gale runs a Substack called Hello Operator. And he does all kinds of fun stuff just using ChatGPT to, for example, analyze call transcripts to try and figure out your messaging. Tell you what, Ray, one of my kids is interviewing for an SDR job. And we got ChatGPT-4, one of the newer models, in voice mode. And we told it, we gave it a LinkedIn profile of a person and we said, be that person. And then drive a conversation with me. And we could role-play practice live. And it was good. And we'd say, be busier, be meaner. You know, you could give it, prompt it in terms of how you want it to be. So, in any case, I think people should be messing around with AI for sure.

Totally agree. 2 things I'd add to that. Number one, if you're going to roll it out across an entire team, your entire SDR team or account managers, make sure you have some enablement and training and change management to make sure they're actually optimizing the use of it. Because there's diverse capabilities and it can create very inconsistent customer and market experiences. And second, understand what the ROI measurements are going to be as soon as possible. If you're going to invest $20,000 a month on Clay or an SDR AI, know how you're going to measure the return. Those are my 2 recommendations.

Got it. And by the way, Ray, I kind of gun jumped myself here. There's 85% of sellers are actually doing the kind of bring your own AI thing. So companies appear to be kind of lagging their employees in AI adoption, which in my mind is not a good place to be. Slide 15 here, they show, I mean, this is kind of shocking in terms of not great news in my mind. They show what I would generally characterize as modest productivity increases from those who use AI versus the, or I'd say efficiency more than productivity. They're looking at magic number, which is really a sales efficiency metric. And they're basically showing, you know, it goes from those who don't use AI, 0.68 to 0.72 in the $100 to $250 million range. In the billion-dollar range, they show from 0.48 to 0.75. So that is a large increase in efficiency. But I was a little surprised by this because, you know, I'd like to see the productivity of AI coming out in things like magic number and CAC ratio.

Yeah, the thing that jumped out at me is I grew up when SAS magic number, if you weren't higher than 0.75, you should go fix your efficiency. And most of these are hovering either under 0.75 or just one segment was a little bit above. So I still think we have a sales efficiency issue out there, Dave.

Well, I mean, this is a little rat hole, Ray. I won't dive too deep into it, but 1 over 0.75 is 1.3. So if I equate that to a CAC ratio, it's going to be 1.3. But the issue is I think magic number is a net new CAC ratio. Um, for most people, so it's gonna drive it up. So I'm not so sure it's that bad. I mean, my rule of thumb is 1.5 on CAC ratio, so it might work out about the same. Um, it all depends on how much leakage you have. All right, Ray, I'm gonna do my last slide and you can wrap us up. Uh, the final slide I want to talk about was slide 17 that shows the demographics of the survey responses. Again, remember, some of this stuff is Gong data just coming out of their database, but some of it is a survey and it's kind of a mix of the report. Over to you, Ray.

Yeah, overall, you know, any revenue leader or a person who depends on revenue to make your number, I think it's a good read. Understand that some of these are averages versus kind of medians, and we look at it from a size company, very important. But it's a great read, and Gong Labs data overall is a great thing to subscribe to.

Well, thanks a lot, Ryan. I guess I'll see you next week.

Okay, goodbye, Dave.

Take care. The Metrics Brothers AI, SaaS, and More is a production of The Metrics Brothers Growth and CAC and a member of the Benchmarkit Podcast Network. By accessing this podcast, you acknowledge that The Metrics Brothers make no warranty, guarantee, or representation as to the accuracy or sufficiency of the information provided or the humor content of the jokes told.

Ahem, Ray.

Information, opinions, and recommendations presented are, according to our spouses, probably wrong and provided for information purposes Only. This podcast should not be considered professional or, for that matter, unprofessional advice. We disclaim any and all liability for any direct, indirect, indirect, misdirect, incidental, special, ordinary, consequential, inconsequential, or other damages arising out of any use of, or God help you, reliance upon the information presented here. Ray Grothreich is based in New York City and available on X @rayreich. Dave Kellogg is based in Silicon Valley and available on X @davekellogg. Kellogg. Schedectity, which is French for unspellable, is not our actual production location. Thanks for listening.