A few KPIs that make a lot of sense to me in this economic environment:
1. Push Counter - take a look at how many times opportunities are slippling.
2. Time Since Discovery Meeting - how long has it been since you've had engagement with your prospetive buyer?
3. % of Accounts in Territory that are Touched - are your AEs and SDRs diligently outreaching all the accounts in their territory?
I'd start by reading Measure What Matters by John Doerr. It's a great resource to truly understand the OKR system with actionable templates and examples. Buy copies for your leadership team and work on developing this muscle as a team. The trick is not so much the OKRs themselves, but it's behavior that it reinforces with your teams to ensure your revenue operations team is staying proactive and focused and doesn't get whipsaweed by the demands of the organizations they support.
You should own all of the KPIs/metrics if you are the first revenue operations hire. Initially, you'll need to validate the data sources and availability, put a system (and potentially tools) in place to capture them and do the calculations and visulization yourselIf the first few times. I once worked at a company that did not look at any metrics in their weekly executive staff meeting. I made it my mission to develop a simple executive dashboard with operational metrics that was reviewed by leadership at the start of the call. It helped galvanize the teams in the facts and drove better decision-making. And by establishing myself as the data expert with finger on the pulse of the business, I utlimately earned a seat at the table.
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.
I think it's good to try and tell stories with data. What is the KPI actually telling us about our business? Develop a recurring insights cadence within your company. Think of it like a quarterly newsetter from Revenue Ops describing how the teams just performed. Spend some time to make it look good with the data visualzed in charts and the details provided in the appendix. After you produce it a few times, you'll start to get traction and the KPIs will become a part of your leadership team's vocabulary.
I like to think about KPIs for any revenue organization in a 3 P's framework :
It's important to understand the performance trends of the company and the most common KPS in this category include:
- Number of Customers (Existing + New Logos - Churned Logos)
- Gross Margin.
For each of these KPIs, I like to look at the numbers vs. goal, vs. last year (YoY) and vs last quarter (QoQ). These are the basic health markers of any company and ones that all revenue ops leaders should know by heart for their companies/business units.
For any company, it's important for a revenue org to be able to deliver a forecast. And Revenue Ops plays a big role in this process, working with sales leadership. Typically, I like to see:
- Week 1 and Week 7 Currrent Qtr Fcs Accuracy - this is usually measured in % terms and is calculated using the final bookings or retention results divided by the forecast at the start and halfway points in the quarter. I am for at least 90% accuracy in Week 1 and 97% accuracy in Week 7.
- Starting Qtr Pipeline Coverage - how much pipeline (signing in the same quarter) is needed at the start of each quarter to hit the bookings/revenue goals, usually represented in X.X coverage ratio form. This one is good becaause it combines your win/converstion rate with your team's ability to predict accurate close dates. For volume and velocity-based businesses, it's important to also note how much pipe gets generated and closed within the quarter and incorporate that component as a KPI.
- Push Counter - how often are opportunities pushing from their original close dates in your CRM? If you see this number start to creep up over time, you're likely going to start to see some forecast accuracy challenges down the road. It means your team's pipeline hygeine is getting sloppy or deals in your market are becoming tougher to predict close timing,
Productiviity (or Effiency):
Over the course of 2022, many companies have made productivity and efficiency metrics a much bigger part of their corporate narrative. And I think a lot of companies will come out of this year in a stronger position because of it. To me, there's not just one or two metrics that can tell you how well a revenue engine is working. I think it takes a variety of productivity-related KPIs including:
- % of AEs hitting quota (Attainment) - I like to use the rule of thumb that when 75% or more of your AEs are hitting 75%+ quota attainment, then you should hire more AEs. If you're not quite performing at those levels, there is more to do before you start hiring rapidly.
- % of AEs winning a new opportunity (Participation) - It's important to look at what % of your sales team is getting a deal across the finish line each quarter (or every month for shorter sales cycles).
- Win Rate / Close Rate - I prefer the $-based metric (win rate), especially if you're tweaking your ICP and trying to sell larger ASP deals.
- Contacts per Qualified Opp - a good metric to dermine if you're single-threaded in your opportunities. More contacts on each opp almost always equals a higher conversion rate.
Growth Efficiency - this metrics looks at how much incremental recurring revenue was generated from new investment in sales and marketing $
- Activity - I'm and old school guy in that I still llke to look at seller and SDR activity levels. You can't sell when you're not in front of customers and I think it's a good idea to hold revenue team members accountable to a set of activity metrics, including meetings held, pipeline generated, new accounts touched to name a few.
My first piece of advice would be to learn. Learn as much as you can about the total addressable market, the product market fit and the buyer's journey for the product or service that your new company is selling. Spend time in the field with sales and SDRs. Read online reviews about your company. Take a sales leader out for dinner/drinks and ask them how they get deals done at your company. Take the AE onboarding courses for new sellers joining your company. Read old board decks and study the metrics. What have been the trends over time? What appear to the the strengths and weaknesses of the revenue engine?
Once you've made good progress in your learning tour, start compiling a list of opportunities - divided between quick wins that can be implemented now and longer term initiative that will require more lift and more change management.
On the hiring front, fight hard for your rev ops budget. You only have one shot to get this right and you need to make a compelling business case for investments in enablement, tools and hiring top notch talent.
I love this question.
The one tool that I can't live without right now is Clari. We run our entire business out of it at the executive level. Q4 is a critical one for any SaaS company at our scale and we rely on Clari to power our weekly forecast cadence, evaluate trends in the pipeline and click into the details of deal health for all of our opportunities, both new and expansion.
I first got introduced to Clari in 2016 while at the TOPO conference in San Francisco and immediately saw the value. It wass 5 years later before I finally became a customer and now it's a tool that is always open on my MacBook and is typically the first thing I look at in the mornings.