Suppose you are the Chief Revenue Officer for your organization. In that case, your goals are clear — you want to maximize revenue, smash quotas, increase revenue predictability, and close deals as quickly as possible. However, you need the best data at your fingertips to meet your goals.
This means you must track specific key performance indicators (KPIs).
If you’ve been in this line of work long enough, you know that some KPIs mean more than others. This begs an important question: Which KPIs should you track?
Revenue growth is one of the most basic KPIs you can track. It refers to how revenue grows over a set period.
Revenue growth is a broad term that can mean different things. It can be a generalized statement: How has your company’s revenue grown over time? However, you can use this KPI to examine specific periods, like a month, a year, or five years. You can also use it to determine revenue growth for a specific product or service. Performing this analysis will enable you to see which products or services are selling and which aren’t.
You should use a platform that can automate the tracking of your revenue growth, such as Next Quarter. By using the Next Quarter Platform, you can enhance the accuracy of your revenue forecast. You can also track revenue growth and identify which product areas may need additional internal resources.
The churn rate is the average number of customers who will stop using your product or service. A lower churn rate means you are doing a better job of retaining customers.
Retaining existing customers is almost always more efficient and less expensive than getting new ones. As such, you want to keep your churn rate as low as possible. A high churn rate can tell you that you have broader issues with your product satisfaction level.
Furthermore, you can also analyze the churn rate for specific products or services. This action will give you a better idea of where you may fail to meet customer expectations.
Win rate refers to the percentage of deals closed. This vital statistic can enable you to determine the success of your sales efforts.
Looking under the hood of a win rate can tell you useful information. For example, your business can use a win rate to determine who on your sales team is succeeding and who may be struggling. However, you can also analyze win rates by product or service. Doing so may enable you to determine if some products or services are more challenging to sell than others. Finally, you can also examine how the win rate changes over time, like after you change a product or alter how you are advertising it.
This data can allow you to determine when your sales actions are successful. Remember that you will need a revenue intelligence platform that helps you determine the win rate and improve it.
Customer Engagement Level
Customer engagement level refers to how your customer interacts with your business. This metric extends beyond buying or selling services. Your business can use multiple factors to determine customer engagement level, including:
- Contacts with your sales team
- Engagement on social media
- Referrals that the organization makes
- Attendance at organization events
You can track customer engagement with a properly configured CRM, such as Salesforce. Overlaying this information with other KPIs — like revenue or churn rate — can help you determine ways to increase engagement and grow revenue. This entire process can be automated using Next Quarter, native to Salesforce. You can automatically use the data gathered via our account growth and revenue intelligence platform to tie customer engagement to revenue. From there, your operation can rely on AI-informed insights to make better determinations about how to improve customer engagement levels.
Customer retention refers to how many customers stay with your business over time. You can alter this KPI based on the time you are examining.
Deep examinations of what factors influence customer retention can be critical. For example, you may determine how customer engagement level influences customer retention. From there, you can choose the most impactful and cost-effective ways to engage with a customer.
With the right data, you can also use customer retention as a proxy for customer satisfaction with specific products or services. Doing so will enable you to determine areas where particular improvements are necessary.
Customer Lifetime Value
Customer lifetime value (CLV) refers to how much revenue the average customer will generate throughout their lifetime with your business. Multiple factors determine the CLV. This includes churn rate, price of goods, and customer satisfaction with your company.
Determining the specific influences of a customer’s lifetime value can be critical in determining what factors enhance revenue growth. First, this information can help you better understand what customers are more likely to spend more money with your business. This can allow you to better target your marketing efforts. Finally, CLV is critical to building more accurate, long-term sales forecasts.
Calculating CLV can be challenging. Fortunately, some platforms — such as Next Quarter — can automate this calculation. You can then use this KPI to gather data about increasing your CLV. Your business can then determine the steps needed to increase this value in the most efficient manner possible.
Average Cost per Conversion
Average cost per conversion is a critical metric for an advertising or marketing effort. It allows you to determine the success of a marketing campaign. This enables the creation of an apples-to-apples comparison.
You determine the average conversion cost by taking an ad campaign’s total cost. From there, you divide it by the number of successful conversions the campaign generated. Lower cost per conversion means a campaign was more successful. You can use this data to understand better what demographics and messages are most likely to generate revenue for your business.
Average Time to Close
The average time to close refers to the time it takes for your team to close a deal.
Calculating the average time to close is critical for determining where to spend marketing dollars, purchase new technological tools, or increase sales training. If your average time to close is too long, you may need to examine what internal processes you can change to achieve the necessary pipeline acceleration. You can also use the average time to close to determine what variables can reduce this time. This information may give you a better idea of what specific factors allow you to achieve pipeline acceleration.
Such steps can only be determined if you have the most up-to-the-second information at your fingertips. Therefore, you will also need a platform that breaks down silos between departments in your business. At Next Quarter, we believe that data should be the sole source of truth and that all departments in your organization should use the same data. That’s why our platform can pull various departments together and give actionable next steps to determine how to reduce your average time to close.
Understand Your Top KPIs
Your job as a Chief Revenue Officer is to grow revenue. To do this, you need the most up-to-date data. At Next Quarter, we’ve built a revenue intelligence engine that leverages sales and conversational data to predict pipeline accuracy and forecast confidently. Our goal at Next Quarter is simple: We want to bring data together to act as a single source of truth and ensure the success of your business. In doing so, we can help bring account growth and financial clarity to your organization.
Are you ready to learn more about how Next Quarter can grow your business and help you track your KPIs better? Reach out to our sales team, and join us to take the next step on your sales and revenue journey.