How Do Revenue Operations Contribute to Go-to-Market Strategy and Setting the Company KPIs?
Revenue operations (RevOps) is a technique that fosters cross-functional cooperation to eliminate gaps in the customer experience and grow the business’s revenue. It unifies the company by integrating sales, marketing, and customer success operations into a single team focused on revenue impact.
A go-to-market (GTM) strategy is a detailed action plan outlining the steps necessary to launch and promote a product. It details the product’s marketing approach, corporate strategy, pricing structure, and distribution strategy, all of which contribute to the firm meeting its business objectives and key performance indicators.
A Go-To-Market strategy consists of five components:
Who is the audience for which you are writing? What are the aches and pains that your product alleviates? Which user profile best describes you?
What issues does your product solve? What is your product’s unique selling proposition? How does it bring value to the customer’s life?
What should the product’s price be, and how many categories should it be divided into? Is your pricing competitive, and does it correspond to the value of your offering? What is the structure of your distribution channel? How are you going to distribute your goods to customers? Is it a physical or an online route of distribution, or a combination of both?
Analyze your rivals’ offerings
What services do they provide? Is the market ready, or is it saturated for your product? What distinguishes your product from the pack?
Collaboration Between RevOps & GTM
RevOps is critical for bringing agility and achieving the GTM plan’s objectives. Typically, managing technologies such as the tech requires a specialized staff that maximizes revenue and aligns business operations. RevOps assists in the development and implementation of procedures that improve the efficiency of the GTM strategy and maximize revenue.
For instance, assume your company’s GTM objective is to increase sales by 75% YoY (year over year). This will define the RevOps team’s goals, namely:
● 30% increase in client retention
● 70% increase in conversion rate
● A threefold increase in product awareness in new markets
● 20% reduction in the sales cycle
RevOps Contribution to Company’s KPIs
After the client approves an agreement, a seamless transition to service, support, and retention expert is critical. Some key metrics such as satisfaction, growth, retention, and lifetime value are monitored. Some of these include:
Which consumers have opted out of your company’s relationship? Why? The churn rate is determined by dividing the total number of customers by the number of customers that do not renew.
Net promoter score (NPS)
NPS quantifies a customer’s level of happiness with their experience and serves as a predictor of business development by quantifying the likelihood that a consumer would suggest your organization, product, or service.
This statistic indicates the growth of the whole client base or specified subgroups of customers.
Acceptance of a product
Both the first and continuing usage of the product or service bought are critical components of customer health. Customer success teams should keep track of product use, including frequency and features utilized, as well as reorders for consumable products and services.
Customer retention cost
While there is no widely accepted formula for calculating this metric, RevOps can compare hours of service and support, the cost of developing tools and systems for support and education, cost savings associated with volume, and similar measures to the total profits from purchases or net revenue generated by a customer.
How RevOps Bring it all Together?
RevOps assist with tying together the customer-facing teams together in one common goal — revenue growth. To accurately assess the health and success of the GTM team holistically, RevOps monitor cross-business metrics, such as:
- Pipeline management and average deal size; understanding the projected revenue.
- Retention and expansions; measuring the extended revenue of a customer beyond the initial sales deal.
By achieving consistent growth within the organization, you must start with putting the strategies, processes, and metrics in place to ensure the GTM teams are aligned with the common business goal. Then, by enabling the team, you quickly allow them to diagnose and manage underperforming tactics before they become barriers to growth. According to Jon Anderson, CSL:
The metrics you choose to monitor, and the frequency at which you monitor them, will provide critical insight into your business operations. What you do with that information will ultimately determine whether you remain stagnant or propel growth and revenue generation.
If you wish to define your revenue strategy and align revenue operations with your business KPIs and goals. In that case, you must hire a revenue operations expert and leader to establish the infrastructure to deliver results and support your GTM teams’ alignment. Together with revenue operations, you will build a scalable revenue machine and growth.