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Consistent revenue growth and renewals are both touted as super important in my org, but net new sales seems to be more important to leadership than retention. How can a revops role help with that?

2 Answers
Lauren Davis
Lauren Davis
Checkr Director, Revenue OperationsDecember 6

It’s not uncommon for leadership to fixate on sales because it’s very easy to see the result: I hire one sales person, I get $X in incremental revenue. But the fact of the matter is that you can’t have sustainable revenue growth without retaining customers.

For this problem in particular, I’d focus on two things:

  1. Breaking down revenue growth to show retention as part of the equation. For revenue this year, what % came from existing customers vs. new sales. If upsells and expansion live in CS, break this out separately. The drivers of revenue growth are NRR and net new sales/new customer acquisition. Both are necessary.
  2. Highlighting the impact of a CSM. As I mentioned, it’s easy to see the direct impact of adding a sales rep (i.e. their quota, $X in bookings/revenue). The goal is to get to something similar for a CSM. This will depend on what CSMs are responsible for at your company (e.g. renewals, upsell/expansion, customer health, product adoption). If CS is responsible for renewals, show % of customers that renew and LTV of customers with and without a CSM.
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Akira Mamizuka
Akira Mamizuka
LinkedIn Vice President of Global Sales Operations, SaaSJanuary 10

At LinkedIn we use the TAM (Total Addressable Market) approach to tackle this problem. First, we separate the "New Business TAM" from the "Existing Business TAM", in order to understand penetration and "headroom" in each category.

Startups, early stage companies (and even mature companies potentially) tend to have a "New Business TAM" that vastly exceeds their "Existing Business TAM". This tends to be the main reason companies prioritize New Business over Existing Business.

A secondary and more mundane reason is, from a financial standpoint, all new business sales contribute to growth; however, a flat renewal has zero growth contribution.

I believe both motions are critical to achieve short and long term growth aspirations. A B2B Tech firm should have a well oiled New Business Engine (Marketing Lead Generation -> Sales Development -> Sales Hunters/ Closers) to capture the New Business TAM as fast as possible. At the same time, we know that successful customers tend to expand their relationships with LinkedIn over time, leading to revenue growth. Therefore having a Go-to-Market model that ensures value is being delivered to customers is also critical for future growth.

P.s.: in SaaS, it can be difficult to measure growth within existing customers - especially when a portion of customers are on multi-year deals. A "same store sales methodology" can be an effective way to measure existing customer growth.

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