Many organizations and business consulting teams are touting the benefits of focusing on developing RevOps teams. But it's not just a matter of switching up your org chart. Chargify touches on the issue: "The reality is that saying you're on board with revenue operations, or RevOps, (the term that's increasingly being used to describe this alignment) is easy. However, it's much harder to define what that alignment means in the context of your unique business and then execute on it."
Whether you want to increase employee and executive buy-in or you want more specific insight into how RevOps alignment positively impacts your organization, see how the change can help you meet your KPI targets. Keep reading to learn more about how to set robust KPIs, how to assess RevOps's impact on them, and how to continually strengthen your SaaS company.
Let's Review What Revenue Operations (RevOps) Is
The traditional split of companies into segmented departments like finance, sales, marketing, and others is beginning to fade away and be replaced by a more cohesive RevOps structure. Instead, RevOps is the entire tech stack, workflow, and human resources that manage the client journey. RevOps teams focus on the whole of the client experience, from initial contact with marketing content to post-purchase support to optimizing the revenue engine and better leading clients through the bowie funnel.
Rather than leaving teams separated by function and task type, the RevOps structure facilitates better internal communication and customer experiences. Since this is a relatively new type of structuring, it's essential that your organization has the right KPIs and insight into RevOps to make the entire organization succeed.
Next, Let's Review KPIs
Key Performance Indicators (KPIs) help organizations and teams measure their movement towards important goals and milestones. Teams can frame initiatives or new workflows around improving their performance in key areas. KPIs then indicate if they're making progress, what changes are the most impactful, and if any processes need to be modified.
3 Critical Components of KPIs
KPIs are different from other types of metrics. Just like SMART goals have clear criteria that general goals don't, KPIs have more components that make them more useful. Three of the essential components of KPIs are:
Targets are the goals or objectives themselves. Establish what you want to have achieved within a set period of time, such as monthly goals, quarterly goals, and annual goals. For example, you may have a goal of increasing conversion rates by 25% by the end of the quarter.
2. Leading Indicators
These indicators evaluate your performance metrics over time to see if you're moving toward your goal. Indicators both show if you're generally trending toward your target and help you determine if you're on pace to meet your goal within the targeted time.
For example, increasing your conversion rates by 10% within the first month can indicate you're increasing at the right rate. Increasing conversion rates by 1% is generally positive, but it indicates your movement toward the target is too slow.
Evaluating progress against your leading indicators can help you revise your strategies and implement coaching or support before the final deadline.
3. Lagging Indicators
Lagging indicators measure past performance as an indication of how you should expect to perform in the present. Rather than setting aggressive indicators based on your targeted goals, you can set indicators based on what you have done in the past. These can serve as a baseline of achievement to expect.
What Makes a KPI a Good KPI?
Make sure your KPIs are robust, specific, and valuable. Some key tips to ensure you create good KPIs are:
- Create KPIs that objectively demonstrate progress toward a goal.
- The KPI should actually relate to and measure your progress.
- Use both lagging indicators as a historical basis and leading indicators to track your progress over time.
- KPIs work best when they have buy-in and support from the team responsible for progress, management, and other key stakeholders.
How Does RevOps Help You Set, Stick To, and Achieve KPIs in SaaS?
RevOps and KPIs are two essential elements for any SaaS organization that wants to succeed in today's markets. But it's not just that organizations need good KPIs to assess the integration and performance of their RevOps teams; it's that a good RevOps team helps you better meet your KPIs. Let's see how.
The 3 Hidden (Internal) Benefits of RevOps for SaaS Organizations
Before you can start to make business policies based on external metrics like customer satisfaction or revenue, take the time to look at internal metrics. Three key internal benefits of a RevOps model for meeting KPIs include:
1. Unified Business Metrics
RevOps teams need more holistic insight into data and feedback. For example, it's not that customer support teams need to care about CSAT scores, and marketing/sales teams should prioritize retention rates. It's that all teams on the RevOps side of things need to care about all of them. This requires companies to shift to a better CRM or dashboard that can effectively communicate dynamic information so everyone can see holistic progress and make more holistic evaluations of their teams' success.
When managers and team leads in RevOps are making annual goals and KPIs (or even extended three-year visions), try to push everyone outside of just the metrics traditionally associated with their role. This can include key metrics like customer satisfaction, net new profit, recurring revenue, and acquisition rates. After all, they all feed into each other.
2. Intra-Departmental Goal Alignment
Even though all teams in RevOps are focused on revenue generation, everyone uses different tools and mindsets to do so. Ensure everyone has a clear understanding of how their role feeds into the measured metrics and revenue overall. Even better, take the time to show different teams that hadn't interacted before (or even had hostile interactions) how all of their efforts support key revenue goals. When everyone has transparent goals and responsibilities, there's more collaboration and fewer barriers.
3. Intra-Departmental Efficiency
One of the biggest issues with traditional departments is the soloing it creates and the inefficiencies that result from that. While KPIs and human initiatives can help solve this, the components of your tech stack matter just as much. Shift your business toward using a centralized tech stack where everyone uses a centralized system that reports all of the customer data, shows all of the workflows that impact the client experience, and indicates progress toward KPIs (both personal and organizational).
Ensure everyone has a clear understanding of how their role feeds into the measured metrics and revenue overall.
Implementing a RevOps style of organization doesn't just increase revenue. Instead, your teams can view the impact on myriad key performance indicators that support an organization with long-term health and a growing client base. Contact House of Revenue today to learn more about how to make sure your business's RevOps team has the KPIs, tech stack, and key roles it needs to drive success.