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How to Measure the Success of RevOps at Your SaaS Company

Most companies can intuitively understand the importance of aligning their revenue-focused departments.

Karen Schmelzer

September 23, 2019

Most companies can intuitively understand the importance of aligning their revenue-focused departments.

It’s seems clear that when sales, marketing and customer support are all working toward the same goals, it improves the customer’s experience and boosts revenue. 

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.

So, how can you tell if your RevOps efforts are actually working?

Measuring RevOps success isn’t exactly as simple as, say, measuring increases in MRR or decreases in churn. But, there are some other relatively simple ways to gauge your progress. 

In this article, we’ll explain a few areas to assess, including:

  • The ease of calculating interdepartmental metrics 

  • The success of interdepartmental handoffs and relationships

  • The clarity of internal responsibility for any moment of a customer’s journey

  • A shared vocabulary across departments

How Easy is it to Calculate Interdepartmental Metrics? 

When your departments are all working together from a foundation of shared tools, systems and values, pulling insights that require data from multiple departments becomes much easier. 

Ask yourself if you can easily get an answer to the question: Which types of customers are the most valuable to my business over time?

In order to really understand this, you need to know a few key things:

  • The full cost of acquiring customers (everything from marketing campaigns to sales commissions) 

  • The full cost of onboarding customers (everything from an increased support workload costs to manual imports) and supporting those customers over time

  • The revenue your customers generate over a lifetime (the average spend multiplied by the average number of months customers use the software) 

The data required to calculate each of these metrics comes from a different department. If the sales, marketing and support teams aren’t working together to track the right kind of data, you won’t be able to get what you need easily. Which means that you will be less informed about customer behaviors and areas of growth and improvement — that’s a sign that more alignment is needed. 

Once you understand the characteristics of your most valuable customers, you can go back and analyze other areas that require interdepartmental alignment, such as: 

  • Which acquisition channels tend to convert these valuable, long-term customers?

  • What tools and/or support do these customers need for success over the long-term, and how can we make sure they get these tools earlier in their journey?

  • Why do these customers tend to cancel their accounts, and what steps can we take to decrease their likelihood of canceling?

  • What kind of pricing structure best appeals to this group, and how does that affect the sales and onboarding experience? 

How Successful are the Customer Handoffs Between Departments?

One of the most crucial moments for converting customers and ultimately driving revenue is when a lead is handed from the marketing department to the sales department.

If leads are transferred to sales too early, the sales team will waste their time with prospects that aren’t ready to buy and haven’t been fully vetted. If leads are transferred to sales too late, you drastically increase the likelihood of losing leads to more timely competitors.

Given that this process is time-sensitive and will likely involve constant monitoring and optimization, sales and marketing teams should always collaborate to set the criteria for when marketing qualified leads (MQLs) should be transitioned into the sales pipeline — and under which conditions this transition will be considered a success or need to be reevaluated. 

By contrast, the transition from sales to customer support may already have a well-defined starting point — the moment when a customer actually makes the purchase and creates their account. But that doesn’t mean that your sales and support teams shouldn’t collaborate on the parameters for a successful transition. 

They need to agree on things like:

  • Exactly what onboarding path(s) new customers should take as they begin using your software

  • What kind of background notes and details about the customer are relevant to pass along to the support team

  • Any unique needs that new customers will have regarding their implementation and use of your software

  • The data that will be tracked to determine successful transitions from sales to customer support 

Finally, although there’s no “handoff” of the customer from the support team back to marketing, these two departments also need to have a close working relationship. Ideally, they will have an open forum that allows them to share feedback and insights on customers in order to market, position and evolve your product based on the pain points and use cases it solves for. 

After all, the support team knows better than anyone what kind of customer tends to have the best success with your software, and which ones tend to struggle. 

They’re the ones who should point out the software’s best features — the ones that are most beneficial for customers — and areas for improvement. 

Ask yourself what kind of role your support team plays in crafting marketing messages, suggesting case studies and influencing the direction of the roadmap. If the answer to any of these is “little to no role,” you have an alignment problem that is likely hindering your revenue growth. 

At This Moment, Who is Responsible for Each of Your Customers?

We’ve already discussed the importance of well-defined transitions from one department to the next. But sometimes interdepartmental handoffs aren’t exactly linear. 

For example, customers who are still using their free trial will probably be dealing with both support and sales teams at once. And customers who have expressed a strong interest in the software but can’t buy until the next budget year begins will be in the realms of both sales and marketing. 

If there’s any hesitation or question about which department (or even which specific employee) is responsible for the customer at any given point, or which criteria necessitate a handoff, there’s room for improvement. 

In many cases, this all comes down to making sure everyone in the marketing, sales and customer support departments have access to the same customer data — and that you have an established feedback loop to share key insights. 

A CRM system that’s connected to your SaaS billing platform can make it easier to know exactly where these responsibilities lie. This can keep your staff from inadvertently dropping the ball when ownership overlaps in multiple departments.

Do All Customer-Facing Departments Share The Same Definitions?

On a truly aligned team, everyone shares the same definitions. What I mean by that is each department is clear on what parameters need to be met in order to complete a specific task or achieve a specific goal.

When departments begin assigning different definitions to the same terms, it’s a red flag for misalignment. (Not to mention a potential reporting headache.) 

A classic example of this misalignment is the varying definition of the term “leads.” Marketing and sales both use the term, but it has historically meant very different things to a marketer vs. a salesperson. 

Similarly, your marketing and sales teams may be looking at the same sales funnel, but care about measuring different key points along that journey. Therefore, the term “conversion rate” can also mean different things to different revenue-focused departments. 

Quizzing your staff on the definitions of common, shared terms can yield a lot of insight into where key concepts may be getting lost in translation across departments.

Organizations with strong revenue operations should aim to train sales, marketing and support teams on how the business defines success in each stage of the customer experience. 

Shared, Revenue-Focused Goals

The best way to understand whether your sales, marketing and support teams are aligned is to assess whether they have the same end goal: more revenue. 

Of course, each department will have its own short-term goals and tactics to focus on. It’s still crucial to focus on boosting MRR and reducing churn, for example.

But each function should be clear about how their own goals impact the goals of the other teams — and they should rally around enabling their fellow RevOps functions to succeed. None of their individual goals matter if the end result isn’t growth of the business, after all. In the end, this is what RevOps is really all about — keeping everyone revenue-focused and revenue-accountable.

As we mentioned in our post Does Your Company Need a VP of Revenue?, most companies start their RevOps journeys by consolidating their data and tools. Then, they work their way up to hiring dedicated RevOps employees before eventually consolidating all revenue departments under the same umbrella on the organizational chart. However, the best tactics for your company under this new, aligned structure will vary based on your own unique needs.

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