For businesses, these are not the best economic conditions and many leaders are expecting that things will only get worse. For many early stage ventures, growth entrepreneurs who recently “got funded” are scrambling to grow revenues and cut costs to ensure they “stay funded”. Times have changed and now early stage ventures will be challenged to build a viable path to break even in order to continue to raise capital. With uncontrolled cash burn rates, many companies will likely face lay-offs, down-rounds, or unwanted M&A activity.
These worsening economic conditions demanding that customers tighten their belts are making it harder to drive optimized, predictable revenue. What remains the same? Delivering your venture’s growth goals requires a combination of accurate revenue forecasting and optimized revenue processes. Unfortunately, most entrepreneurial ventures lack both, as many current marketing automation platforms (MAP), customer relationship management (CRM) solutions, business intelligence (BI) tools, and manual spreadsheets lack the visibility, automation, real-time data, and insights needed to optimize their revenue engine. To address these problems, sales, marketing, and customer success functions are morphing into a new category of solutions, RevOps, to help optimize the performance of revenue teams, platforms, process and performance measurement. RevOps achieves this by leveraging data, signals, and interactions between buyers and sellers to analyze and then optimize revenue workflows such as forecasting, pipeline management, and sales performance. These revenue operations solutions allow companies to maximize the potential of their revenue engine, with proven impact on key drivers of top- and bottom-line performance such as forecast accuracy, performance management, and improved productivity.
For many of us who worked in 2000 when the dot com bubble burst, our experience tells us that the road forward will be littered with the carcasses of businesses who fail to effectively manage their revenue operations. Don’t let this happen to you! To help you, Traction AI offers you the Entrepreneur's RevOps Survival Checklist:
- Scenario Planning: Work with your leadership team to understand and define the financial impacts of various economic scenarios. With each scenario, define your opportunities and risks. Map out your revenue plans for this quarter, next quarter, and the rest of the year. Ensure your review data across multiple revenue dimensions to frame up how the broader economy might impact your operating plan. You need an honest, unbiased assessment and you should consider each segment, region, and industry, and assess where you will most likely experience headwinds. This requires you to examine quickly and completely your entire Revenue engine, across every go-to-market team. Together with your revenue leadership, your C-suite and your Board,, you should pressure test each of these scenarios.
- Know Your Metrics: Entrepreneurs must take a measured approach to scaling their businesses, with a renewed focus on key financial and operational metrics. Now more than ever, Bessemer Ventures’ Laws of Cloud Computing must be observed for business survival.
- Bulletproof Your Forecast with Facts: Given expected downward business pressure resulting from your customers’ buying plans, you need accurate and complete data to predict the future. For example, your team needs to understand your company’s pipeline coverage and quota capacity this and next quarter, relative to the last four to eight quarters, so you can better predict headwinds you can expect. Answers to these types of questions are imperative: What has been my historical average starting pipeline position? How fast and well can my revenue team build new sales pipeline? What’s my average selling price (ASP)? How much coverage do you need with each territory/segment? What are the historical conversion rates (i.e., MQL to SQL; SQL to Opportunity; opportunity to customer). How much quota capacity do you need to deliver your pipeline? Focus on the right metrics powered by strong data hygiene is required.
- Customer Renewal Management: Entrepreneurs must first shore up their existing customer base. They should be pressure testing and looking for early indicators that you may have downward pressure on your renewals and churn. To do this, entrepreneurs must employ a sound process to identify churn and expansion risk by checking in with all customers calendared for a renewal in the next six month. It’s back to basics as you evaluate usage and engagement data with every customer account, getting an early read on renewal timelines, account health, expansion opportunities, and who may be interested in a multi-year deal. Quickly identify high risk, high-value accounts quickly and put rescue plans in place to save these customers. Flag the customers that may churn prematurely for a deeper look at their account. Revisiting your price-to-value equation with your product offerings is important as your customers re-evaluate their expense budgets. This process should take a couple weeks and can’t bleed into months.
- Simplify, Streamline, and Automate: There are literally hundreds of technology platforms to support a company’s ability to drive revenue. The risk of fragmentation and inefficiency is high. And, we all know that platforms don’t deliver revenue – people do. And, to do so, they require technology platforms, best demonstrated business process, and real-time, data driven performance measurement. Without it, business intelligence data lives in siloed departments and unoptimized technology tools are never leveraged to their full potential. Take the time to map out your RevOps strategy to ensure your marketing, sales, customer success and finance activities are simplified, streamlined and automated to maximize and drive continual growth.
While this checklist is not exhaustive, we are confident that a robust RevOps strategy will create reliable and predictable revenue streams during these uncertain times and uncover new opportunities for revenue traction. If you’d like to learn more about RevOps, please feel free to reach out to us and schedule a consultation.