5 must track revenue operations metrics

This informal CPD article ‘5 must track revenue operations metrics’, was provided by Product Marketing Alliance, a company founded in 2019 with a mission of uniting product marketers across the globe.

Understanding revenue operations metrics

Often, revenue operations (RevOps) professionals struggle to measure the success of their initiatives. This can lead to problems, as not having a clear return on investment means the C-suite (1) is less likely to invest in your RevOps program.

Not having a budget, and lacking backup from executives is a huge blocker for RevOps teams who have to work cross-functionally and manage the revenue team’s tech stack. This is a problem that can be solved by presenting accurate metrics of success to the leadership team.

With this in mind, it’s no surprise that monitoring metrics and key performance indicators (KPIs) was rated as the most common revenue operations responsibility in the Revenue Operations Alliance’s State of Revenue Operations 2024 report (2), with 92.25% of operators saying it’s a part of their job description.

Let’s break down the five most tracked revenue operations metrics identified in the report, so you can prove your team’s worth.

ARR & MRR Metrics

The most tracked RevOps metric is recurring revenue with 79.84% of revenue operations professionals utilizing this data point. In particular, this metric is often measured as annual recurring revenue (ARR) and monthly recurring revenue (MRR).

ARR predicts the recurring revenue your organization will generate in the upcoming year. This metric is a prediction, so it assumes no major changes to your customer base (such as an increased churn rate, or a sudden spike in new customers).

While MRR predicts recurring revenue generation for the upcoming month. This measure can also vary but is likely to be more stable as it looks at a smaller time period.

Both types of recurring revenue measurement have their place in a revenue operations professional’s arsenal as ARR can highlight year-on-year growth rates, while MRR provides a more granular look at revenue. Which to prioritize also depends on your business’s billing schedule – yearly billing means a focus on ARR, while monthly billing means an emphasis on MRR.

RevOps influences recurring revenue by supporting marketing, sales, and customer success teams to thrive, as well as by optimizing billing processes, to make contract renewals smoother.

Close rate

The next most popular revenue operations indicator is close rate with 68.99% of RevOps pros tracking this metric. Close rate is the number of deals closed-won divided by the number of opportunities in the pipeline. It looks to see how successful your sales team is at converting opportunities into deals.

While this is a metric commonly associated with sales team success, close rate can also be used to prove RevOps ROI (Return on Investment). How? By considering how RevOps impacted sales team productivity and confidence.

Revenue operations teams support sales reps by improving processes, reducing blockers, and implementing new sales technologies. With that in mind, if close rate increases after a RevOps initiative, there’s a good chance that ROI can be (at least partially) attributed to revenue operations.

Revenue retention

Up next is revenue retention, with 65.89% of RevOps pros tracking it. Revenue retention measures the number of customers (and the amount of revenue they bring in) being retained over a certain period (usually yearly or monthly).

This allows your leaders to understand how many customers are churning or downgrading their spending with your company over time. A high retention rate means you’re keeping your customers happy and coming back to your organization.

Revenue operations teams support this metric by:

1. Aligning sales, marketing, and customer success around the key benefits of your offering.
2. Ensuring sellers recommend the most appropriate product to prospects (not just the most expensive one).
3. Support customer success teams to quickly respond to customer queries and effectively onboard customers.

Customer churn rate

Fourth on the list is customer churn rate with just over half (53.49%) of RevOps pros tracking it. Essentially, churn is the opposite of retention – so revenue leaders aim to reduce churn rates as much as possible.

In case that wasn’t clear: churn rate measures the number. of customers who’ve stopped being a customer of yours over a period of time. Revenue operations impacts churn in a similar way to retention, but some orgs may choose to keep track of their churn instead (while others may track both).

Sales qualified leads

Finally, sales-qualified leads (SQLs) are tracked by 51.94% of revenue operations pros. SQLs are opportunities that have been validated by the sales team as having a strong intent to purchase.

Keeping track of SQLs ensures your sellers have a strong pipeline and ensures they meet their quotas. RevOps teams can influence the number of SQLs in the pipeline by optimizing lead generation, improving processes for approving leads, and implementing lead scoring systems. These systems can also improve SQL quality, leading to more deals closed-won.

Final thoughts

With these five metrics to monitor, you should be well on your way to proving the value of your revenue operations initiatives and gaining buy-in from your senior leadership team.

We hope this article was helpful. For more information from Product Marketing Alliance, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.

REFERENCES

(1) https://www.investopedia.com/terms/c/c-suite.asp#:~:text=C%2Dsuite%20gets%20its%20name,chief%20information%20officer%20(CIO).

(2) https://www.revenueoperationsalliance.com/state-of-revenue-operations-report-2024/#:~:text=42.63%25%20of%20revenue%20operations%20teams,respondents%20work%20as%20solo%20practitioners