Steering a high-growth company without widely agreed-upon strategic growth initiatives is like piloting an airliner without a flight plan. Generally speaking, it's inadvisable.
Revenue leaders typically plan and measure a wide range of targets across marketing, sales, and customer success in order to hit their revenue goal. But the best go a step further, deploying revenue operations to track and manage progress toward those goals using the latest technology for forecasting and insights into the broader revenue picture at every stage.
In a recent Forrester study of more than 300 revenue decision-makers at high-growth SaaS companies, more than half of respondents said their organizations are focused on two key growth areas in the next one to three years: customer retention and expansion into new markets.
Here’s the catch: Two-thirds of respondents said revenue-process optimization is important to achieving each of those initiatives, but less than half are meeting their quarterly forecasts within a 10% margin. That means they may be going to market with substandard revenue processes, which can be a serious drag on these growth initiatives.
“Meeting growth goals requires a combination of accurate revenue forecasting and optimized revenue processes. Most firms are lacking in both, as many current customer relationship management (CRM) solutions, business intelligence (BI) tools, and manual spreadsheets lack the visibility, automation, real-time data, and insights needed to optimize the revenue engine.”
Here’s a look at how revenue operations can propel high-growth organizations to meet their strategic goals over the next few years.
Driving higher customer retention with revenue operations
Two-thirds of respondents to Forrester’s study said revenue process optimization is important to achieving their customer retention goals. But what does that look like in practice?
Get a clear view of net dollar retention
Net dollar retention measures the change in revenue from the existing customer base. Crunchbase defines a “good” NDR number as anything over 100%.
“The beauty of net dollar retention as a key performance indicator is the balanced nature of the metric,” says Conor Nolen, Global Vice President, Account Management, at Clari. “NDR is the byproduct of your ability to establish and manage lasting partnerships with your customers with a common goal—evolution and growth. As a partner, my ability to deliver value will result in increased consumption of my offerings and a long term, renewing relationship.”
Every additional 20% of annual NDR growth for a SaaS business represents a doubling of annual recurring revenue in five years, according to Tomasz Tunguz at Redpoint Ventures.
Clari’s artificial intelligence assess account engagement signals and a broader platform history to gauge the likelihood of renewal, and offers a score that allows managers to make more informed decisions about where to deploy resources to reduce churn, or expand accounts.
See how Clari maintains a rigorous NDR process to monitor our own customer health.
Make sure all accounts operate off a shared source of truth
Revenue leaders need a bird’s eye view of every account to assess what’s at risk and what’s healthy—a shared source of truth that includes email activity, meeting frequency and history, and a record of the key players on your side and the customer’s.
That way, you can easily inspect each account at regular intervals and answer questions like:
- Which accounts are engaged?
- Which are disengaged?
- Which of the latter can I save?
Focus on the people who can deliver the biggest return on your time
When at-risk accounts need attention, you need to be able to create a rescue plan without time-consuming background meetings or digging through spreadsheets. Clari makes that easy as your shared source of truth, and by helping you discern who the power brokers are on the client side—and more importantly, whether or not they’re engaged.
Clari’s Relationship Insights allows you to make sure the right people are involved so you can strategically spend time with the people who ultimately influence and control the budget and the purchasing process.
Revenue operations powers new market and vertical expansions
More than half of respondents to Forrester’s study said they’re planning on expanding into new markets or verticals in the next one to three years. Overall, 63% said that revenue-process optimization is important to achieving those goals.
There are a number of different ways a company can expand. The most critical step is to determine which to do, and when.
Going upmarket
Given a target list of accounts and the teams assigned to them, leadership can track how opportunities are created, engaged, and progressing to ensure that the right people are involved with the right revenue programs.
Going downmarket
Smaller ASPs and a high-velocity revenue model requires visibility, tight workflows, and more regular inspection cadences to ensure consistent execution as deal volume increases.
Expanding into new geographies
Each target geography has nuances that require careful planning. Often, the details only become apparent when teams are engaging the target. A real-time understanding of how the revenue process is working in new theaters is critical for accelerating ramp time and ensuring success penetration into new markets.
Introducing a new product
The successful launch of a new product requires exemplary cross-functional coordination across go-to-market teams. To assess the success of the new product, companies must have a means of evaluating demand generation at new and existing accounts, and must be able to track that demand through the opportunity lifecycle.
Expanding into new industries
Many companies find product-market fit in a given market segment, but once execution against that target is perfected, they need to translate their product’s features and benefits to new industries. Complete instrumentation of the revenue process allows leadership to see how well the new value proposition works as new kinds of targets are engaged.
Read more about how Clari can help with your market expansion efforts.