What are some KPIs that you find over-hyped and/or unimportant?
This is a great question.
A big one for me is Total Pipeline, or Rolling 12 pipeline. I don't think that metric tells you much without additional context. Sometimes a team can more easily hit their goals with a smaller pipeline and better conversion rates. It's easy to assume your GTM strategy is working when overall pipeline continues to grow but it could also mean you have a pipeine quality issue and we've acquired a lot of low propbability opportunities in companies outside of ICP.
Also customer NPS can fall into this category if not used the right way. I think it's more important to look at NRR and % of sales from existing customers. If customers are truly happy, they will stay with you and buy more.
This might be a little controversial, but I think a lot of the multi-touch media mix attribution models you'll see from vendors and companies are supremely over-hyped UNLESS they are actually helping you make different decisions about your Marketing mix and strategy. Don't get me wrong, there are definitely people out there doing this right, but unless you have unbelievable cookie accept rates and tracking mechanisms across the web (or you're Google), a lot of it is, frankly, made up for the sake of pushing you to spend more on their platform or so that you have cool metrics to show your boss. I'm excited to see what AI is going to do for multi-touch attribution, with big companies like Google already doing awesome work here, but don't get sucked into "doing" multi-touch attribution and signing up with an expensive vendor just for the sake of doing it. Make sure you're doing it right with a clear sense of what you'll be able to change and optimize with the additional knowledge.
When selecting KPIs for Revenue Operations (RevOps), it’s essential to pass each potential metric through the “so what” test, ensuring it aligns with our organisational goals and drives actionable outcomes. One KPI that often sparks debate is pipeline size and while some might find my stance on this a bit controversial, I believe it's critical to look beyond just the size of the pipeline.
Focusing solely on the size of the sales pipeline – essentially, the total value of all opportunities at any stage in the sales process – can be misleading. An oversized pipeline can give a false sense of security, suggesting robust sales health even when it's not the case.
While I don’t underestimate the importance of having a sufficiently sized pipeline, it’s vital to also focus on the shape and quality of that pipeline. This means looking at factors like the stages where deals are concentrated, the age of opportunities, and the win probability of each deal.
Metrics such as average deal size, conversion rates at different stages, and sales velocity offer a more comprehensive view of pipeline health. They help in assessing not just how big the pipeline is, but how likely it is to convert into actual revenue.
By focusing on these more detailed aspects of the pipeline, we can gather actionable insights. For instance, if a large portion of the pipeline is stuck at a particular stage, it prompts action to address potential bottlenecks.
In summary, I advocate for a balanced approach. Recognizing the importance of a healthy pipeline size is crucial, but it should not overshadow the need for quality and manageability. A bloated pipeline can be as problematic as an insufficient one. The ultimate goal here is to ensure our teams are not just filling the pipeline for the sake of numbers but are strategically building and nurturing opportunities that have a higher likelihood of conversion.
In conclusion, while pipeline size is undoubtedly an important metric, it doesn't pass the "so what" test on its own. It needs to be complemented with other qualitative metrics that assess the pipeline's health and potential for revenue realization. By focusing more on the quality of the pipeline and the right metrics to measure this quality, we can ensure a more efficient and effective sales process, truly aligned with our organisational goals.
So I may get drummed out of the Sales Strategy business for this answer, but I would have to say "raw" Pipe Generation. Yes Yes I know thats crazy! I very specifically included the word raw because I am referring to pipe generation numbers that have not been scrutinized by strategy/sales leadership. I say this because sales people are SMART. They know all the tricks of the trade. If they know they need to have $750k of pipegen each quarter as an example, I have seen time and time again sales people submit opportunities (cough) often for next FY or several quarters away that are, frankly, not real. They will game the game to check the pipe gen box, and the pipe is full of garbage. This can throw off your coverage calculations and paint a rosy picture where there is not one. As a result, it is a MUST to regularly inspect your business' pipeline in order to maintain an accurate pulse of your business.
Here are some pitfalls I've seen when defining rev ops KPIs:
Focusing on just lagging indicators
Missing KPIs that cover the entire GTM market team
Focusing on generic leading indicators
Lagging Indicators - in rev ops its natural to think about the number of contracts sold and their dollar amount. However, more sophisticated rev ops teams build out a portfolio of leading indicators they regularly analyze to drive contract conversions. Hypothesize all the key activities of your pre-sales and sales teams that you believe are critical for moving along the opportunity. Regularly track and analyze these activities to determine
Which activities have strongest causal effect on winning the deal
What combinations and sequences of these activities maximize deal win
GTM Coverage - ensure that you have KPis that cover all the GTM teams. For example, if your GTM ops team supports the professional services or enablement team. make sure you have top-level OKRs that are related to each of these teams. Doing so will help
Drive accountability from these teams by assigning OKRs
Ensure they have a plan to help progress against the company's top priorities
Help foster an inclusive culture across the broader team
Generic Indicators - chances are you may have had a metric along the lines of 'have X meetings w/clients each week' or 'create x pitches per month'. The pitfall of such metrics are that they assume all meetings and pitches are equal and focus on quantity over quality. Use data to help refine your KPIs to become more targeted. Work with your analytics team to determine what specific types of leading activities (e.g. # of meetings w/ client data scientists, # cost-savings narrative pitches to CXOs) have the strongest attribution to closing deals. Then define more tailored OKRs using these insights, inspect progression against these KPIs, and use the data to expand upon and/or refine your KPIs.
I don't think there are many RevOps-related KPIs that are over-hyped or completely unimportant (we're not dealing with Community-Adjusted EBITDA here). The important thing is that you understand your business, the drivers of it, and the activities you want the people in various GTM roles to do for your business goals and needs. KPIs ultimately have to provide insights and value to the business so as long as you're doing that, and there aren't so many metrics everyone's eyes glaze over, you're probably on the right track.
There are a few other answers to this question on Sharebird (I wasn't sure that "hype" and "KPIs" was really a thing so I did some research...) and I agree with those assessments. But note that the authors point out not a problem with the metric itself, but the risk of it being misused or not connected to the broader business objective and outcome. In other words, context and implications matter with metrics.
● Over-hyped: Vanity metrics like social media impressions or raw lead counts without qualification.
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