In the midst of the COVID-19 crisis, market leaders have been searching for answers on how to approach the challenge of not only protecting the existing revenue base but also and continuing to grow revenue. They are seeking ways to see how their business is trending, the metrics to track, and determining the proper cadence for reporting KPI’s and producing them regularly.
SBI’s COVID-19 Revenue Growth Approach outlines an 8-step GTM Framework to manage revenue growth during the crisis. The framework describes strategies to protect revenue through forecasting, budget allocation and focusing on virtual selling. Additionally, there is a revenue growth revision strategy, which includes mobilizing resources for late-stage deals, revising the GTM strategy, and assessing channel mix and coverage. The final step is to align metrics for the new GTM and deploy the KPIs throughout the organization.
The pandemic may have caused a shift in the KPIs that businesses are being measured against. After revisiting your revenue growth approach, align the KPIs to ensure that the most important ones are being tracked to drive focus and execution in turbulent times.
If you are unsure where to begin, SBI has identified 10 key metrics that matter and are broken down into Behavioral, Leading, and Lagging Indicators. Check out this article to read about why these were chosen and why you should care about them.
Behavioral Indicators – Tracking the Day-to-Day of a Virtual Selling Model
Behavior indicators track the key activities to maintain client relationships and drive new business. In a virtual model, this takes the form of monitoring rep productivity in order to allocate resources dynamically.
- Selling Time:
Selling time is a behavioral indicator in a virtual selling environment driven by a crisis like COVID-19. With reps selling virtually, you will naturally see a decrease in the time spent traveling to and from customers. It is up to you to make sure that time is reallocated effectively.
Leading Indicators – Setting Yourself up to Be Ready for the Future
Leading indicators help you predict the health of your organization and indicate the health of a pipeline and the forecasting revenue. In this crisis, the leading indicators will help you move along stalled pipelines and replenish lost opportunities.
- % Revenue (or Bookings) Invested in Sales and Marketing:
You may have had to reallocate your budget. This is a crucial metric to help your Board understand your new budget numbers and to contextualize it to capture the overall return.
- Pipeline Coverage Ratio:
Chances are, parts of your pipeline may have stalled or been lost altogether due to the crisis. The pipeline coverage ratio is an important metric to measure the sales opportunities relative to the assigned quota. You will need to revisit your quota assignments, and this metric will assist in that process.
- Sales Rep Turnover:
Turnover is the percentage of sales professionals that leave your organization over a given period of time. The cause can be voluntary or involuntary. In uncertain times, it is critical to retain top talent and create an environment that allows them to be successful.
Lagging Indicators – Gain Insight From the Past to Know Where to Make Adjustments
Lagging indicators will help you identify where opportunities are slowing down, churn is increasing, and changes to close rates are occurring. The lagging indicators will tell you how efficient and effective your team was during the crisis and will provide an immense amount of value post-crisis
- Bookings Attributed to Marketing:
How effective is Marketing in sourcing or influencing opportunities? This KPI is measured as the percent of total bookings attributed to marketing sources.
- Annual Bookings per Rep (or per FTE):
Amount of total new business bookings produced per sales professional. This metric is largely dependent on your sales cycle, average deal size, product/service complexity, etc. You will need to monitor this metric across segments and geographies.
- Dollar Retention Rate
In crisis times, retention is the new growth. You must protect your existing customer base by prioritizing accounts and getting the right people in the most effective roles. The retention rate measures how much revenue has been retained over a given time period.
- Revenue Mix
Existing base renewal or upsell, existing base expansion (cross-sell), and acquisition (new customers) are the 3 main categories that you should be looking at for sources of revenue.
- Quota Attainment by Rep
You will likely need to align quotas to the new reality. The quota attainment KPI accounts for how well your targets are set at the individual and territory levels. You want to look at overall attainment as well as the percentage of your reps that are hitting their quota, and what the top performers are doing.
- Win Rate
This is an important metric to track in crisis times because you may find that opportunities are slowing down, close rates are lagging, and cross-sell/upsell growth is decreasing. Measuring your win rate and comparing pre-crisis metrics with the current state will provide valuable insight into the health of your pipeline and business overall. Win rate is simply the number of deals won in any given year divided by the number of total opportunities closed in the same time period. This metric can be further segmented by product, region, segment, or stage.
How are you approaching the problem of re-aligning your KPIs to your altered strategy? Are all of these KPIs relevant to you, and how can you think about scaling this up or down? SBI has several tools that will help you plan and implement these KPIs into your organization. The KPI Process Planner Tool will allow you to identify a customized process for tracking key metrics and benchmarks, assign ownership to specific people and teams for maintenance, and highlight gaps in your current knowledge base that need to be filled. Additionally, the KPI dashboard tool helps to visualize the key metrics and includes meaningful metrics outlined in this article. It provides the insight that allows your organization to work off of a single source of truth.
Help your team navigate the new normal by addressing the 8 steps in SBI’s COVID-19 Action Plan. If you would like more information on how to mitigate revenue impact and enact your adjusted KPI’s in these turbulent times, contact our revenue growth help desk.