RevOps Co-op Weekly #23 - Accelerating revenue by the numbers
Allye O’Brien, Director of Revenue Operations at Chief, talks with RevOps Co-op about setting the right benchmarks, managing team KPIs, and leveraging that data to increase funnel productivity.
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🏎 Accelerating Revenue By the Numbers
Based in New York, Allye O’Brien is the Director of Revenue Operations at Chief.
Allye’s transition from Director of Sales to Director of Revenue Operations seems unconventional, but her operational approach to leadership prepped her for the operations world. As a director who focuses first on optimizing the team she has through systems and processes (rather than reflexively expanding territories), the new role was a natural fit.
First: Everyone Has to Start Somewhere
A lot of people hesitate before establishing metrics. They don’t have the technology or right configuration to track what they want.
Don’t let your hesitation get in your way. “The first thing that I tell people when they ask me how I set benchmarks when I don't even have a bench to mark (or to sit on for that matter) is to just get started. Don't be afraid of throwing spaghetti at a wall and see what sticks. Start setting some numbers in place, even if it's on a Google spreadsheet because you don't have Salesforce yet.”
If you’re still worried about choosing something you’ll regret being held responsible for, the key is to focus on what matters most:
The sales funnel
Avoid metrics that ultimately don’t always translate to success, like a rep’s volume of calls or emails. Although we’d love to think that the more times we ask, we hear yes—if you tie a KPI to an activity, people will artificially inflate their numbers.
The more important foundation to put in place are measurements for each stage of your funnel from lead submission to renewal:
Second: Focus on Conversion Rates
Your first phase of KPIs will be focused on defining metrics and collecting data so you can set benchmarks (more on that later). Next, you’ll want to look at what is and is not progressing through your funnel. This will help you understand where your teams are misaligned or if you have system issues.
“For every benchmark that you set, you want to look at what didn't make it in. If we're talking about BDRs at the top of the funnel and we're looking at lead to accepted or qualified conversion rates, we want to understand what happened to the leads that weren't qualified and weren't accepted.
“We have to make sure the BDR close the loop. We want to understand the same about opportunities that didn’t close. You want to always be looking for a closed loop. Ultimately, our goal is to understand—unless the lead is daffyduck@disney.com—how we can re-engage with the lead at a later date if they aren't ready now.”
For example, if your lead to accepted rate is low, you may have misalignment on your definition of a qualified lead between marketing and your BDR team. If your opportunity created to qualified rate is low, there’s likely misalignment on your definition of a qualified opportunity between BDRs and full-cycle sellers.
Third: Focus on Velocity
Once you begin collecting data on volume and conversion rates, begin looking at how long it takes to move from one point to the next.
“Date stamp everything that you do. Salesforce is our poison of preference, but whatever tool that you're using, whether it’s a CRM or Google sheet, timestamp absolutely everything.”
Why?
"When you get to a stage at your company where you need to forecast and dig into pipeline management, you want to be able to understand the leads that you get from either outbound prospecting or marketing and another channel. You need to understand what each channel or program takes to convert so you can estimate when a spike in leads will actually close. In a lot of B2B businesses, that could be three to six months from now."
Setting Benchmarks
Take some time before drawing a line in the sand.
"Measure everything for at least 90 days before you start throwing benchmarks or KPIs out there for people to start referencing. Ninety days is the absolute bare minimum that you want to be looking at a metric before saying, 'This is what I think good looks like.' Be prepared to review that and revise it time and time again.
“One week or one month of data is never going to cut it.”
KPIs by Team
KPIs for SDRs
To gauge whether or not a BDR is doing well, you want a mix of early indicators and measurements for how their work progresses with the full-cycle seller. This includes:
Marketing qualified lead to sales accepted lead
Sales accepted lead to opportunities created
On-time scores
Opportunities created to pipeline added
Opportunities created to opportunity closed
Your BDRs may not be responsible for a poor close rate, but it’s still a very important benchmark. If you have one BDR paired with multiple full-cycle sellers, it will be easy to see whether a low close rate is the BDR’s issue or if you have a problem with the full-cycle seller not working as a team (or not closing in general).
“This is controversial. But just bear with me. I hate tracking activity. I don't think activity volume is a good KPI. I don't think telling people that they need to hit 75 calls in a day or a hundred emails in a day is a good metric for success. And here's why—straight from my mouth to your ears. I was an SDR, and I would call my mother to make my numbers for the day, especially when our team worked remotely.
“But you do want to look at on-time scores.”
For those unfamiliar with the term, an on-time score is used when a team has an SLA tied to outreach or uses a playbook tool that utilizes timed sequences.
Examples of SLAs would be setting a goal of following up on mid-priority leads within one day of submission or a goal of three days between accepting a high-priority lead to qualifying them. Management would then use a KPI to understand what percentage of follow up met the SLA.
"Putting a number on activity is never a good benchmark for a full-cycle sales team or a top of funnel sales team. However, you still want to look at the activity and ask if they're contacting the right people on time.
In Outreach or Salesloft, sales reps set their own cadences. Check to see whether or not they are following their own cadences. If 75 people are in a call sequence that was supposed to be completed ten days ago, that deserves to be followed up on by a manager.
“Don’t focus on the sheer volume of calls. Focus on how many people they had lined up to call and whether they did what they set out to do.”
KPIs for Full-Cycle Sellers
Full-cycle seller KPIs should revolve around whether the rep is closing business at an acceptable rate and how quickly they’re moving opportunities through the funnel. This helps management understand how they should be forecasting their direct report’s pipeline and whether the rep needs coaching at certain points of the sales cycle. At a minimum, you’ll want to track:
Opportunity Win Rate
Sales Cycle: Time Opportunity Created to Time Opportunity Closed
Close Lost Reason
Average Contract Value
Renewal Rate (even if they aren’t responsible for renewing)
If your sales team as a whole is taking a long time to close deals, it's a prompt to look at whether objections or product issues are stalling the opportunities. Metrics for how opportunities are progressing through your sales stages can also be handy for coaching and enablement. For example, if someone is exceptionally good at converting open opportunities into qualified opportunities, you may want to replicate their pitch deck.
“You also want to look at why things are closed lost. You want to be able to see trends. You really want to know if you can do something about a bad win rate. A bad win rate could be due to poor qualification from your SDRs/BDRs or full-cycle sellers selling poorly. Has a rep lost the will to sell at the moment or burned out? Or did the prospect not have the budget to spend. You know, what, what are some reasons why this might not be working when rates by source?
“The last one is renewal rate by rep. And this one's surprising, but a sales team's job is not over when the contract is signed. If their deals are not quality and their customers aren’t renewing, you're going to have massive issues with profitability, growth, and scale within your organization. Making sure that customers renew is vital.”
KPIs for CSM and AMS
Who is responsible for these metrics will depend on who is responsible for renewals. These metrics will include:
Time from first opportunity close to customer onboarded
Renewal Rate
Renewal Sales Cycle: From first actively engaged (if auto-created) to opportunity close
“There have been situations in previous orgs where certain pairings of AEs and AMs work better than others. You want to look at the renewal rate by the rep that originally closed the opportunity, but then also the renewal rate by the CSM rep that was responsible for renewing that opportunity.”
Accurately forecasting renewals is critical for the business. Suppose your renewal rate is trending lower than expected. In that case, you will need to get in front of the problem by adjusting other areas of the business (incentivizing new sales in addition to offering renewal discounts).
Who should be responsible for renewals?
“I personally believe that anybody who is doing the onboarding and doing the engagement and ensuring adoption for the client that they've just brought on should be the person who is responsible for the renewal. The renewal starts the first day of their engagement with your product.
“If they aren't onboarded properly or the tools and implemented properly, there is a pretty high likelihood that they are not going to renew.”
Check out the full video and post at the RevOps Co-op video series 👉🏻 Accelerating revenue by the numbers
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