In our final KPI Wednesday blog post of 2024, we draw from Revcast's ebook Revenue Growth: The Metrics You Can't Ignore. The book includes a chapter devoted to sample ideas and recommendations on how to incorporate various metrics into ongoing revenue plan performance scorecarding.
When KPIs are viewed individually, you often miss the overall context and narrative of how your company is performing. Your company's go-to-market effort (GTM) is in reality a supply chain; it is interconnected, and one area can’t function without the other. The objective is achieving your overall targets for growth and efficiency, not optimizing any single KPI. It makes no difference how much you hire if you can’t generate enough pipeline. If you have low conversion and Win Rates, generating more pipeline isn’t going to address deal production.
Creating scorecards is the benchmark for better understanding the overall performance of your GTM: how one KPI impacts the other, where the set of KPIs forecast you to finish, providing comprehensive signals on what to fix and where to invest.
The KPIs you choose for your scorecard should paint a narrative and point you to where you should further investigate – to answer the business questions you need to understand performance and trends, make decisions, and drive toward your goals.
Example Revenue KPI Scorecards
The following view allows for representation of the full GTM supply chain by sales team segment, to identify upstream and downstream issues and opportunities.
with a small set of sales execution and capacity and people-related KPIs.
If for example you are only looking at Total ARR, Win Rates, and Quota on the Street for the small business team in a forecast meeting, your performance quarter-to-date is looking good and on track. “All green!” But the small business segment is high velocity. Closed revenue for the quarter typically includes a large number of closed deals that are created in the same quarter.
So there is a need to monitor upstream KPIs with the same urgency you had monitoring closed revenue. This is where problems are evident: SDR productivity and opportunity production are down, as are the Coverage Ratios. This will likely lead to the pacing of closed ARR dropping off and create risk for hitting your targets in the next quarter.
With that in mind, the following is another example of a scorecard that is more comprehensive in the area of pipeline creating, but doesn’t include sales capacity KPIs.
These two examples demonstrate why it's important to, as a team, thoughtfully identify the KPIs that are critical for the top-level understanding and monitoring of each of your businesses or segments. Each has its own unique motions, strategies, and objectives.
For example, if your enterprise segment is focusing on an ABM strategy to generate pipeline, you should include ABM KPIs such as number of target accounts, average number of contacts at each account, and touches per account. These would not be applicable for a high-velocity segment, where the focus should shift to velocity-based KPIs such as Sales Cycle Length, Discovery Meetings, Revenue Pacing, Created and Closed Pipeline, and Conversion rates.
It's also a good idea to align on scorecards for the next fiscal year during the planning process. The strategies you adopt and what you plan for is what you need to measure, not just a copy of what you are using for the current year. This drives alignment of the scorecards to the company’s plans and strategies and makes it easier to administer. Constantly changing and creating new scorecards throughout the year creates an administrative burden, and insights are missed or not aligned to objectives.
Revcast Helps with Your KPI Scorecarding
Gathering all the data and formatting it for regular monitoring and scorecarding can feel overwhelming. Especially to ensure you're getting alerted as early as possible when things are going off track -- or better yet, trending more favorably. Revcast not only provides excellent dashboards and reports in-app for tracking your revenue plan's performance on a constant basis, it also offers proactive notifications that can help you communicate updates to stakeholders.
Here's an example of such a weekly summary report that can be sent from Revcast pushed to your designated Slack channel:
Such updates at a regular cadence can keep your GTM leadership team members on top of things and addressing risks and opportunities as they emerge. To learn more about how Revcast can help and to see our KPI reporting in action, set up a 30-minute demo here.
