How Sales Operations can Focus on Measuring Revenue-Driving Metrics
Posted on Jun 13, 2020 | 25 min
About the speaker
Billy Stein is a Sales Strategy & Operations Manager at ServiceTitan.
Billy has plied his trade as a sales professional, and used that learning to good effect with a renewed passion for using data to inform a more effective sales process. He is part of an outstanding team at ServiceTitan that delivers a mobile, cloud-based software platform that helps home services companies streamline operations, improve customer service, and increase sales. ServiceTitan’s end-to-end solution for the multi-billion dollar residential home services industry.
Sales Success Depends on the Customer’s Success
His vision for that role and how that connects to the vision for the company is that they are a customer-first company. That uniquely ties itself to their messaging, the way we create our product feedback and the way they execute their sales process.
To validate that their flow is customer-first, they keep in mind the goal of sales being “When you bring on a customer, you don’t just bring on a customer. You bring on a partner.”
In SaaS, the platform that you’re selling is only part of the package. You also bring a service with it. Build things to make sure that the people who partner with you are successful.
You can monitor success in a number of ways, whether it’s annual contract value, how many additional seats do they buy down the road, do they buy add-on products. But, when we validate our behaviors you can see a quantifiable outcome based on it, for example, how is the customer performing based on their adoption of your platform? Are they making money? Is life easier based on bringing in a software.
Use your customer success team to be proactive and keep up with measuring the success of your customers.
When you measure sales, you have to look at it as one stage of the customer journey. It builds like a snowball; everything you do upfront leads to greater outcomes down the journey.
Good Sales Data Draws a Straight Line to Revenue
How do you recognize the difference between good data and bad data when you’re analyzing, projecting forward, and making decisions? All the data needs to point a straight line to revenue because ultimately that’s the goal of a sales organization – to make a company money.
When we look at data, be it something as small as how long is the talk time on an average sales touch to did we explain what step 13 of implementation is, it needs to be able to draw a straight line to revenue.
What does revenue attribution look like beyond closed-won? If you look at ACV – average contract value – it all starts with the sales development representatives who are the tip of the spear. Bad data on an SDR, for example, are call counts and e-mail counts. Booked meetings is also an example of terrible sales data. It’s not just that you book a lot of meetings, it’s that you book a lot of meetings that have a high qualifying rate. And what kind of dollars associated can the company begin to forecast?
A great metric for SDRs is what Billy calls pipe seat close rate. If you take a look at the total number of seats or licenses an SDR generates into a pipeline, then what do the AEs actually close based on that number? For example, if I’m your SDR and if you’re my AE, and I qualify 500 seats and then you go in and you sell two hundred and fifty of them. I have a 50 percent pipe seat close rate.
Pipe seat close rate tells a lot about how those conversations go for sales development representatives; setting expectations upfront and being very transparent and what our goals are, what our vision is and what partnership may look like. SDRs who do well at this end up being good AEs because they learn quickly how to close at every stage of the deal.
A health metric for a SaaS company is how long an SDR stays in their seat. How much coaching does it take for them to move up and promote. If they get hungry for a junior AE role, you want them to stay with you rather than jump to another company for that role.
Aligning Marketing, Sales, and Customer Success
If you take a customer-first approach, then great data for an account executive is around churn rate because you can make the company twenty thousand dollars in the month of May and I might make the company fifteen thousand dollars in the month of May. But if you don’t set proper expectations and you don’t equip your customer for what the next stage of the journey is, then if you have any drop-off, say you lose 5K, then your ACV is exactly the same. So churn rate is a great metric to coach AEs on.
Your toolset has to align completely to your overall vision. In hyper-growth that’s critical, because if your long-term vision does not drive every one of your behaviors along the way, then you start spending recklessly on tools. You don’t connect everything the right way and you get this very ugly, jumbled up customer journey that puts your company revenue in jeopardy and you measure the wrong things along the way.
Agility During COVID-19
As a B2B platform, you have to consider where the margin needs to be big and where you need to lean it out a bit. ServiceTitan was made to be a business operating platform for service contractors. If a sales leader said, “How should we be prioritizing our sales?” I’d recommend prioritizing your core offering – focus on selling that.
Your core offering is where you can have a healthy line of sight around what margins are going to look like during COVID, because we don’t know how long this thing is going to go for. And with add-on products, you can be agile on some of your smaller items. Then you can get creative later with free trials or extended contracts.
If you’re trying to sell your core and then push down on prospective customers every single thing you offer all at once they will become tone-deaf. That ends up distracting from the customers’ main pains, and devaluing your core offering, and devaluing your customers’ needs for what you offer.
As Sales Operations manager you have a vision of what optimal revenue performance looks like now and over the next few quarters. How do you bring executive leaders into your vision or viewpoint? Billy shares how their shared vision and data, as well as the economic times, informed their decision to focus on their core platform and delay rolling out a new release of their platform to a new vertical.
The RevAmp podcast derives from two words: Revenue + Amplification. This series has been produced specifically to give a voice to the sales and revenue operations professionals who have invaluable experiences to share. We have seen the scope for this role, as well as the recognition, expectations, and tools have rapidly changed over the last couple of years. The reality is that there are not enough high-quality resources for fellow professionals to use as a benchmark or learning curve. DealHub knows how important it is to be well resourced so we have put together this RevAmp podcast for your benefit.
The Revenue Amplification
Listen to Leading Sales and Revenue Operations Professionals