Here's a story that will haunt you...
Back in 2022, there was once a revenue leader who had established strong KPIs around MQLs, Pipe Gen, and Win Rate. She deployed a sound strategy with execution focused on a targeted ICP, segments, field deployment, and channel-specific demand that drove toward these KPIs. Every week, her sales managers would review these KPIs, and everyone was thrilled to see the business remain on target.
They finished that year strong, hitting the bookings and ARR numbers for the company.
In 2023, they continued to execute these same plays and monitor performance against MQLs, Pipe Gen, and Win Rate. The Sales team continued to outperform on these KPIs and was excited that it appeared they were on pace for an outstanding 2023 performance.
But this past summer, the CEO met with this revenue leader, asking why so many customers were churning. The revenue leader was unprepared. She'd only been monitoring booking revenue and not paying attention to performance after the Kickoff.The CX leader had raised this concern over the churn number with her earlier in the year, but she had waved it off as a problem for CX to address.
Coming out of the meeting, she had her team immediately assess what was happening with churn. After several weeks of analysis, they found that they were churning nearly 50% of the customers in a specific segment they had targeted in 2022.
A deeper analysis found that the current customers in that same high-churn segment were not deploying her company's software, so churn was likely to worsen. It was too late for the revenue leader to offset this churn with increased new business activity and this New Business activity was going to cost 3x the amount of the planned retention. Thus, the company saw ARR decline this year, which led to layoffs, including the revenue leader.
Is there anything more frightening than when your sales transactions are performing well but the business is declining because you're not selling to a sustainable market that will build the revenue foundation of your company? Strong sales performance can often hide the chink in one's armor until it's too late. Getting the sale done is still the beginning of the work to grow revenue.
This is what happens when we have:
👎 Siloed GTM functions
👎 Misaligned goals across the GTM functions
👎 Only look at leading indicators for New Business
👎 Evaluate performance by win rate instead of customer-leading indicators (i.e., adoption, usage, engagement, etc.)
This is what RevOps is for.