AMA: HubSpot Vice President of Revenue Operations, Sowmya Srinivasan on Revenue Ops KPIs

This is a tough question to answer! Though not intentional, as a Post-Sales RevOps leader, I can share - clearly understanding the drivers of churn and especially breaking down what is addressable and what is not is something that is often not prioritized. Having a clear framework to categorize churn - product driven, experience driven, customer driven, macro-driven etc helps an organization design plays to address the addressable, improve overall CX and this can go a long way in delivering the right outcomes to both customers and the business.

What are some KPIs that you find over-hyped and/or unimportant? Any metric that may look impressive but doesn’t really move the needle on the business is over-hyped or unimportant. It could be any of the following - * Vanity metrics - Metrics focused on popularity and not value. Eg: Site Traffic, Social media posts, high # of calls/activities * While high traffic can be good, it's meaningless if those visitors aren't converting into leads or customers. Focus on traffic along with conversion rates instead. * Number of calls or cases closed - activity based metrics can incentivize the wrong behavior without associated outcomes. * Incomplete or misleading KPIs - Metrics that don’t tell the full story or give the complete picture. Eg: Number of customer engagements, number of user logins * Logins/Users: While this metric can indicate product adoption or usage, it doesn't reveal the depth of usage or correlate directly with business outcomes. * Number of meetings: While this is important to track rep efficiency, effort etc without the associated quality or tangible outcome, it is hard to assess impact. * Metrics that are not aligned to business objectives - anything that is not a leading or a lagging indicator of business performance and not aligned to objectives is unimportant. As a revenue operations leader, evaluate all KPIs to keep and focus those that matter and those that help track and progress business performance. And more importantly, ensure we have the right mechanism to deliver outcomes!

Before I answer the ‘How’, I want to start with the ‘Why’. Here why it is important to socialize KPIs - * Fosters accountability: Know how performance is measured and what is expected of you. Clearly defined KPIs and regular reporting create transparency and accountability. * Bring everyone to the same page: To ensure teams work together, it is important that everyone understands the KPIs and how their work contributes to moving the needle. Navigate together! * Increases engagement: When we understand the "why" behind the work and can see impact, we improve engagement. KPIs provide a clear picture of progress and achievement, boosting morale. * Enables data-driven decision making: KPIs provide valuable data that can be used to make informed decisions about strategy, resource allocation, and process improvements Now, how to socialize before work begins , set the stage - 1. Keep it simple: Explain what is being measured and why it matters to the company's goals. Show how individual contributions connect to the big picture. Everyone needs to know their role and how it contributes to winning. 2. Work together, Collaborate: Involve teams in setting KPI targets. Make it inclusive and seek inputs. This fosters a sense of ownership and encourages everyone to strive for success. 3. Over Communicate: Answer questions, address concerns, and be transparent about why certain KPIs were chosen. This builds trust and ensures everyone is on board. When the work is done, keep the momentum going - 1. Share regular updates: Provide frequent progress reports and make the data easy to understand. Understand the current state and what we can do to improve. 2. Make it visual & engaging: Make it easy to understand progress and trends. Use charts and graphs to present data in a clear and engaging way. 3. Celebrate the small wins, enable success: Recognize achievement, Celebrate wins, both big and small, to keep morale high and reinforce positive behaviors. 4. Be flexible and adapt: Things change, so be ready to adjust KPIs to stay aligned with business goals. Foster a culture of transparency, accountability, and shared success!

Setting targets or key KPI’s without enough insights is definitely a tricky task. Here are some steps I would recommend - 1. Research, research, research - conduct market analysis, understand demographics, customer profile, and any unique factors to consider. Understand the competitive landscape - products, services, offerings, market cap.. And leverage any case studies to understand challenges to consider and factor in. 2. MVP - Minimum Viable Plan - Focus on the key items , basically anything that directly aligns with business goals. Design the initial KPIs with intent to learn and tweak. 3. Be agile and iterate - Be ready to experiment and pilot - test different approaches, learn what works best. Have a clear cadence for review and be ready to adjust based on progress and learnings. Embrace failure, KPI’s may at-times require revision or maybe even reboot. 4. Leverage Experts & embrace local talent: As I learned from Jeetu Mahtani, Hubspot Alum, in a recent GTM podcast , having team members who are familiar with the local culture and business practices can be invaluable. Leverage them and learn from them 5. Set Directional Targets : Instead of precise numbers, setting targets around ‘improving by X%’ or ‘reducing by Y%’ is a completely reasonable approach. Remember, Progress over perfection! Good Luck!

When we think of some core KPIs, the buckets that are critical to understand - * Direct impact on revenue/growth: These metrics directly reflect your ability to retain/grow customers and generate recurring revenue and accelerate growth. * Actionable insights: Insights enable outcomes. Identify areas for risk and opportunity to operationalize the CS strategy * Leading indicators:While outcomes are paramount, key metrics, like CSAT, usage insights (product adoption), customer engagements etc can help assess risk and opportunity, and help us take proactive steps to deliver the right business and customer outcomes. Here are some critical CS Revenue focused KPIs (not necessarily in order) - * Revenue Retention (NRR/GRR): Measure Gross & Net Revenue Retention. It tells how much recurring revenue we are getting from existing customers, factoring in upsells, cross-sells, and churn. NRR > 100% ⇒means we are not just retaining revenue, but growing it from an existing customer base. * Customer Churn Rate (Full Churn & Contraction): The flip side of retention. It measures the rate at which we are losing customers.. I would say this is the most important indicator, as even small increases can significantly impact the bottom line. Deeply analyze, understand drivers to identify areas impacting customer experience and need attention. * Customer Lifetime Value (CLTV): This predicts the total revenue we can expect from a customer throughout their relationship with your company. A higher CLTV means more profitable customers, so focus on strategies that increase it (e.g., onboarding, engagement, upselling). * Renewal Rate: A straightforward but crucial metric. It shows the percentage of customers who renew their subscriptions. Track this over time and dig into why customers don't renew to address any underlying issues. * Product Adoption- Usage : This measures how well customers are using the product or service. Higher adoption usually correlates with higher satisfaction and retention. Monitor feature usage and identify any roadblocks hindering adoption. * Customer Satisfaction (CSAT) and Net Promoter Score (NPS): These gauge customer experience and happiness. While not directly revenue-focused, they're strong indicators of future retention. Unhappy customers are more likely to churn, so address issues promptly and proactively. * Time to Value (TTV): How long does it take customers to realize value from the product? A shorter TTV leads to quicker wins, increased satisfaction, and higher retention. Optimize onboarding and ongoing value process to accelerate TTV. It is also important to understand the leading indicators (for your core KPIs) to ensure you are able to operationalize the strategy to impact both top line and bottom line growth. Good Luck!