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Revenue Operations is on everyone’s mind right now. And they should be.

• Gartner claims that 75% of the world’s highest growth companies look to deploy a RevOps model by 2025.

• When companies align people, processes, and technology, they achieve 36% more revenue growth and up to 28% more profitability, according to Forrester.

• 21% of companies that hired a RevOps function see an increase in alignment as well as productivity across their GTM teams.

These numbers speak for themselves. Revenue Operators have impact.

But after talking to 100s of RevOps folks, they all say the same thing:

“I want to do important strategic work, but I’m stuck in my tools without anyone to save me.”

RevOps are involved in a lot of processes, across departments and the entire business. Despite this, it’s still difficult for them to see the direct impact they have on revenue. That goes for how others in the organization see them too.

Having an understanding of the full funnel – clearly seeing how everything in the business is connected – that is the superpower of the revenue operator. Not utilizing it fully is foolish.

The Problem Today

Revenue Operators are the ones responsible for servicing other teams and departments, making sure their processes run smoothly. But when it comes to making strategic decisions, they’re often left out because they’re just doing “tools”.

These tasks are all important, but they rarely have much impact on revenue. However, there are three focus areas that do move the revenue needle:

Bottom-up planning: Focused on actual numbers and realistic goals, hunting down gaps, resource allocation, and testing out budgets. But today this usually happens in a depressing sheet named ‘FY24_plan_Q1_24, V.1.4.23’, or similar, that was never created for the purpose of complex planning in the first place. And, sure, your plans might start off promisingly enough and you manage to hit the targets for Q1. But soon your plan becomes infected with hidden assumptions, complex formulas, and even human error – making it impossible to trust, and even interpret.

Monitoring the full funnel: Moving from being seen as a (mere) System Administrator, to a strategic Revenue Operator, you need to guide the business towards where the biggest opportunities are and articulate the solutions. However, today’s disconnected go-to-market systems and lack of granular targets make it impossible to identify the true root causes of where the business starts to go wrong. And BI can’t solve this alone.

Running business reviews (QBRs): Here’s where good revenue operators find opportunities for growth. Sadly, these happen 90 days too late and mostly consist of pointing fingers, and rarely lead to real improvements.

These problems are too difficult and expensive to get rid of. At least until yesterday. 

Today, you have Growblocks.

Finally – a Solution

The world’s first purpose-built revops platform for revenue operators: Growblocks.

Now, you can:

Create Accurate Bottom-up Plans 

Quickly calculate your baseline and identify the gaps before you start adding actions – your bottom-up planning done in minutes, not days.

We all know the feeling. You’ve been planning for months, confident that you’re ahead of schedule, when someone asks you to move some numbers around “just to see what impact it would have”. Too familiar, and never fun.

Growblocks enables you to create an accurate bottom-up plan, while showing you the revenue impact of any new investment. And it will just take you a few moments.

• Add planned actions such as hires, price changes or projects

• Add assumptions to improvements, such as leads or conversion rates

• See the revenue impact in seconds

With Growblocks you can quickly draft a what-if or best case scenario to test your ideas out. This lets you immediately understand what those lower ACVs and dropped conversion rates mean for the budget, and what impact a new hire or marketing effort will have.

You’ll get the full picture, how you can allocate resources efficiently, and what significance your initiatives have for the business as a whole.

Understanding the immediate effect of your plan is invaluable. And you’ll reap the same benefits when outlining your next move too. Whether that’s an entirely new market segment, a new department, or finding new marketing tricks to convince your Nay-sayers.

On top of this, when everyone can see how you’re achieving your target and understand why, they’re much more likely to buy into your plan. Improving planning gives revenue operators a better chance to make smarter decisions, stay ahead of customer needs, and optimize their sales and marketing strategies.

Monitor Revenue and Solve Issues Instantly One Place

Growblocks lets you monitor your entire funnel metrics, with all and any of its volume and efficiency metrics, and signals you when something is off.

All of a sudden you’re able to not only monitor and detect issues, but articulate a solution as well. A plan is only good if it works, and it’s up to you to keep an eye on it and adjust at all times.

And the sooner you’re notified, the sooner you can act. Growblocks instantly gives you full funnel visibility to track targets, actuals and your projected performance, all in one single place.

• Volume metrics: Traffic, leads, opportunities, customers, revenue etc.

• Efficiency metrics: ACVs, CVRs, Sales cycle length etc

• Dimensions & filters: Revenue stream, region, attribution, traffic grouping, product

• Performance signals and flagging

It shows you exactly what’s happening and why it happened, letting you claim a more proactive role – someone that oversees and engages with the entire revenue production. You’re able to run what-if analysis and best case scenarios, and much faster than before.

Having this complete oversight will let you act in time, guaranteeing smoother sales processes, increased conversion rates, and ultimately, more revenue.

And don’t worry, you’re still getting all of your favorite data stuff. Growblocks integrates with +200 commercial tools. It just lets you add so much more.

Create Reliable QBRs Faster

Detailed reporting with cause-effect relationships and a full-funnel view.

The struggle of working with reviewing multiple funnels is something many will recognize. The funnels are filled with different motions of different sizes, and in different segments on different markets. The amount of data quickly adds up, and creating a report becomes both difficult and extremely time-consuming.

Growblocks does it all in minutes. And in detail.

With Growblocks you can create your reports and reviews much faster, and you can dive much deeper into your revenue streams using filters and drills.

You’ll have a full-funnel view, with clear cause-effect relationships and precise root cause analysis, and you can even export your findings as slides for that end-of-the-day presentation – how neat!

• See how the quarter ended across all metrics

• Identify root-causes of missed revenue targets

• Review impact of actions, such as hires and projects

• Add outcomes from QBRs as actions to your plan to estimate revenue impact

And the best part? With our projections, you’re able to use the past to understand how next quarter looks – and this is where you can make an immediate impact on revenue.

Creating a smoother process for yourself will free up resources for you to focus on important insights, and you won’t have to lumber down into the gloomy mines for more data gathering.

It’s Time to Have an Impact

To deliver your best work, and to improve the work of others, you need to make sure you’re giving yourself as a Revenue Operator a chance.

Have a look at Growblocks, understand how it will improve your work, revenue, and results, and book yourself a demo.

Deciding on how, when, and where to spend resources is essential for all businesses. Any little slip can cost you months of progress, trust between stakeholders could be lost, and missed opportunities might never come back.

You need to find out which channels, markets, or products are the most efficient for you. And which of them you can scale up.

Getting an overview is an important first step. Thankfully, there are simple ways for you to do this.

Let me introduce a particularly helpful box.

What’s in the (Grow-)Box?

Toni’s Growbox looks like this:

Toni’s Growbox – Scalability/Efficiency Model

If it seems familiar, it’s because it probably is. 

Maybe you’ve come across the Boston Consulting Group Matrix? It’s a planning framework that was developed by Bruce Henderson at the Boston Consulting Group (BCG) back in the 1970’s.

Their matrix looks like this:

Boston Consulting Group Matrix

They’re a little similar, right?

The BCG Matrix has historically been used by large organizations with diverse portfolios to evaluate the state of their products and services. It’s used to map out offers according to their Market Growth and Relative Market Share.

Just like the Berkshire Hathaways of the world, you can use it to identify potential growth yourself.

You just have to adapt it to suit your needs first. Like Toni did.

Boxing Like A Heavyweight

Toni’s Growbox (fancier)

Toni’s model – his Growbox – is a two-by-two plot graph with two axes. One axis representing Efficiency (measured as CAC Payback) and the other Scalability. Naturally, the higher the efficiency and scalability, the better.

The reason why you want to differentiate these two dimensions is simple: some really efficient channels or markets simply can’t be scaled up. And some really high-growth alternatives are just way too inefficient for you to spend on.

Plotting your initiatives like this is an easy way to help everyone see where investments should go.

So, let’s get into the details. 

In the example above, I’ve plotted marketing channels into the four quadrants. The Stars are the top performers, the Cash Cows are trusted and stable, the Dogs are underperforming, and the Question Mark requires consideration, as they represent uncertain growth potential and could end up as either Stars or Dogs, based on their efficiency once matured.

Plotting out channels like this quickly shows how current investments are doing and where there’s room to grow. Is it possible to increase Google search, and would that be efficient? Is it wiser to use those resources trying to improve my SDRs instead? Or, should I put more emphasis on paid social?

Looking at the four categories in a product life cycle model, they become even clearer. Your Question Marks still have their undetermined potential, the Stars are growing strong, Cash Cows are matured and plateauing out, and your Dogs are declining and you should consider putting them down.

Channel or Market life cycle model

If you want to make the picture slightly more complex, you can also introduce different sizes to your plotted bubbles – indicating the current size of the channel. This will help you understand the impact of growing that particular channel or market over another. 

Just map out your intended markets in the same quadrants, categorize them as Dogs, Stars, Cows, and Question Marks, and you get the same, immediate overview.

Toni’s Growbox with Markets

Domesticating Dogs and Cows

Now that you’ve plotted, it’s time to put your plan into action. 

Stars

As your Stars represent initiatives with both high efficiency and high scalability, your strategy should be to invest heavily and take advantage of their potential. The problem will be that as the more you invest, the less efficiency that channel/market will have – let’s call that Toni’s Law, for simplicity’s sake. Invest too much, too fast, and you can turn that brightly shining Star into an enigmatic Question Mark, as you no longer can be sure that your investment will generate enough value for you.

So, in order to make sure your Star stays a Star, you will also need to deploy efficiency improvements. In other words, the Stars will not only demand a lion’s share of your money, but most of the brain power in your organization too. You will likely end up spending more than half of your resources on your stars. And that’s a good thing – it’s worth it.

Cash Cows

Your Cows are well-established and represent stable cash flow in low-growth markets. It might not sound exciting, but on the other hand they should require little investment and can be trusted to still generate cash.

You can think of your Google search as your Cash Cow when viewing it through the channel lens. You can just leave it be, of course, and let it generate leads for you in peace. Or, you could up your spending. But allocating those extra funds would probably not give you much in return.

What you should be doing is to find out where you could cut costs while having as little impact as possible. If you can find and free up resources to spend elsewhere, without changing how your Cows perform, you’ve wrangled them better than most. And that cash can then be re-deployed to your Stars.

Dogs

These have low scalability and efficiency, and will generate little value for you. They don’t require significant resources from you, but they also yield low returns. This makes them inefficient in terms of spending any time or resources to try to get them to perform.

You need to decide if it’s worth taking a chance on them. Can you improve on the cost per lead or conversion rates, for example? If you can’t, or if your Dogs don’t complement or enhance the rest of your plans, you should consider divesting to avoid tying up resources. In short: reduce what you spend on them and improve quickly, or call the dog pound.

There is a caveat here, as you might operate with channels that won’t get any attribution in your data. For example, that out-of-home advertising you did on the 101 (the tech highway in the Bay Area), or your cab campaign in NYC (btw, those are cheaper than you think), won’t suddenly pop up as high-yield channels in your CRM.

Question Marks

Your Question Marks have potential, but suffer from uncertain efficiency. You just don’t know enough about them yet. If you’re starting up a new channel or trying to get foothold on a new market – that would be your Question Marks.

As you can’t rely on their efficiency, and slightly tweaking the allocated numbers won’t give you the answers you need, you’ll need to figure out what your Question Marks are – almost like a product market fit. This is important work, as the Question Marks also represent your future growth – they will become your new Stars once your current ones have plateaued.

A good example of this is Zoom. During COVID, everyone and their aunts jumped onto the software, it instantly exploded, and a videoconferencing Star was born. But the meteoric rise of their product also exhausted their planned roadmap and all their projected S curves. They were plateauing and needed new ways to grow. Enter Zoom Webinars and Zoom Events, and Zoom Connected Conference rooms and Zoom Appointment Schedulers – aka. Zoom Question Marks. Their initiatives paid off, business continued to boom, and the search for their next Star could begin.

With the right investment case, your Question Marks can become your Stars, but you should also be prepared for them to turn into Dogs if they fail to gain traction. The best way to treat your Question Marks is to invest carefully, focus on efficiency gains, and then invest aggressively when you get there.

In the ‘Growth at all Costs’ era Question Marks typically got insane amounts of investments, as it was argued that more investments will help drive efficiency-improvements. Only in some very rare cases this proved to be the case.

Model Behavior – for Retention and Acquisition

The Growbox is a way to quickly analyze resource allocation based on scalability and efficiency, and it works equally well whether you’re looking at acquisition or retention.

However, like all models and matrices, the Growbox won’t give you all the answers. It’s just a first step towards making better decisions. The model has problems with oversimplification, limited focus on market share, and perhaps a lack of truly actionable guidance.

To make better decisions, you should always look to complement the Growbox model with other strategic analysis tools – perhaps even Growblocks?

Now, Enter the Matrix

Something as sensitive as capital allocation can be made easy. Force yourself to categorize your offer and you get a better overview and understanding of how you should distribute your resources. Mapping out your allocation this way in a model is a tremendous help for planning and testing strategies, both in the short-term and long.

There’s a Revenue Formula episode on this exact theme, where Toni and Mikkel dive deeper. Listen to it here:

See you later, allocator!

Imagine embarking on a quest to redefine the growth trajectory of your B2B SaaS company. This journey, while challenging, is crucial for those at the helm of steering their organizations towards uncharted territories of success. The compass guiding this expedition? Revenue Operations (RevOps). But what exactly is RevOps, and why has it become the buzzword echoing through the corridors of SaaS enterprises? Let’s dive deep into the world of Revenue Operations, dissecting its components, significance, and implementation strategies to ensure your voyage is not just a shot in the dark.

Understanding Revenue Operations

At its core, Revenue Operations is the strategic integration of sales, marketing, and customer success operations to drive growth through operational efficiency and keep all teams aligned towards the common goal of revenue generation. But why is this integration so pivotal for B2B SaaS companies?

The Genesis of RevOps

The concept of Revenue Operations might seem like a novel addition to the business lexicon, but its roots are deeply embedded in the need for organizations to eliminate silos between departments. In the traditional setup, sales, marketing, and customer success operate as separate entities, often leading to misaligned goals and inefficiencies. RevOps emerges as the beacon of integration, ensuring that all departments are not just rowing in the same direction but are also synchronized in their strokes.

Consider the analogy of a relay race. If the baton handoff between the sales, marketing, and customer success teams is fumbled, the race towards revenue growth is lost. RevOps ensures that the baton handoff is seamless, keeping the organization sprinting towards its financial goals.

Key Components of RevOps

Revenue Operations is not just a fancy term but a comprehensive framework comprising several key components:

• Data Management: Centralizing data across departments to ensure decisions are made based on a unified data set.
• Process Optimization: Streamlining processes across sales, marketing, and customer success to improve efficiency and effectiveness.
• Technology Stack Integration: Ensuring that all tools and platforms used by sales, marketing, and customer success are integrated and communicate seamlessly.
• Performance Measurement: Establishing a unified set of metrics and KPIs to measure the performance of sales, marketing, and customer success initiatives.

The Impact of RevOps

The implementation of Revenue Operations has a profound impact on the organization. It not only enhances operational efficiency but also significantly improves customer experiences by providing a unified approach to customer engagement. Moreover, RevOps fosters a culture of accountability and collaboration, breaking down the silos that once hindered growth.

Why RevOps is a Game-Changer for B2B SaaS

In the fast-paced world of B2B SaaS, staying ahead of the competition is paramount. Here’s why RevOps is not just important but a game-changer in this context.

Aligning Goals Across Departments

One of the most significant advantages of RevOps is the alignment of goals across sales, marketing, and customer success. This alignment ensures that every department is working towards the same objective – revenue growth. It eliminates the counterproductive efforts that arise from departmental silos, making the organization’s growth efforts more cohesive and effective.

Enhancing Customer Experience

RevOps places a strong emphasis on the customer journey, ensuring that every touchpoint, from initial engagement to post-sale support, is optimized for satisfaction and retention. This holistic approach to customer experience is crucial in the SaaS industry, where customer lifetime value (CLV) and churn rates are critical metrics of success.

Driving Operational Efficiency

By streamlining processes and integrating the technology stack, RevOps eliminates redundancies and automates repetitive tasks. This not only reduces operational costs but also allows teams to focus on strategic initiatives that drive growth.

Implementing Revenue Operations in Your Organization

Understanding the significance of RevOps is one thing, but implementing it in your organization is another. Here’s how to get started:

Assess Your Current State

Begin by assessing the current state of your sales, marketing, and customer success operations. Identify areas of misalignment, inefficiencies, and data silos. This assessment will serve as the foundation for your RevOps strategy.

Define Your RevOps Strategy

Based on your assessment, define a RevOps strategy that addresses the identified gaps and aligns with your organization’s revenue goals. This strategy should include the integration of processes, data management practices, technology stack, and performance measurement systems.

Implement and Iterate

Implement your RevOps strategy in phases, starting with the most critical areas of improvement. It’s important to remember that RevOps is not a set-it-and-forget-it solution. Continuous monitoring, measurement, and iteration are key to refining your RevOps framework and ensuring it evolves with your organization’s needs.

As we conclude this journey through the realm of Revenue Operations, it’s clear that RevOps is not just a trend but a strategic imperative for B2B SaaS companies aiming for sustainable growth. By fostering alignment, enhancing customer experience, and driving operational efficiency, RevOps positions organizations to navigate the complexities of the SaaS landscape with agility and precision. The journey towards implementing RevOps may be challenging, but the destination—a thriving, cohesive, and efficient organization—is undoubtedly worth the effort.

You’ve probably run into NPS surveys everywhere.

Maybe you’ve been approached in the street by a person armed with a clipboard and questions. Or perhaps you’ve been caught by a pop-up window demanding you to rate your experience of an online purchase? At times they even prompt you with a recommendation as soon as you land on the page – completely pointless.

You know what I’m talking about, right?

Net Promoter Score (NPS) isn’t some new metric. Back in 2003, Bain & Company developed the system to measure customer loyalty and satisfaction by how likely they are to recommend a company, product, or service to others. The NPS is based on this simple question: “On a scale of 0 to 10, how likely are you to recommend us?”

Respondents are put into three categories depending on how happy they are to recommend: 

• Detractors (0-6)
• Passives (7-8)
• Promoters (9-10)

The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters, resulting in a score that ranges from -100 to +100.

For context, the average NPS score for B2B SaaS is somewhere between 31-50.

This single number is then supposed to provide organizations with valuable insights into their customers’ overall attitudes, and also act as a powerful indicator of business growth and customer retention.

Surely, a little too good to be true.

The Problems with Net Promoter Score

Too Oversimplified

You ask a single question, “How likely are you to recommend us?” and expect your customers to encapsulate their entire experience with you in a single number. Things are more complex than that. Try asking someone to describe a twelve-course dinner they had with a single color. It just doesn’t work like that.

People Play Games

Many companies have resorted to gaming their NPS to inflate their scores. The tactics range from selective surveying of only happy customers to offering incentives in exchange for some positive feedback. Practices like this undermine the integrity of the NPS system and distort their customer satisfaction. Gaming the NPS leads to a misrepresentation of customer happiness, restricting any accurate data analysis, and prevents companies from addressing the real issues that are affecting their customers.

Three Categories to Fit Everyone

NPS classifies your customers into either Promoters, Passives, or Detractors, depending on how they score. Great. But does that tell you anything about the respondents themselves? All you know now is how they feel about recommending a product or service, and nothing about why they feel that way. It makes it impossible to draw conclusions or get any real insights.

Likelihood to Recommend – That’s It? 

NPS focuses solely on the likelihood of a recommendation, but something as intricate as customer satisfaction is not a one-size-fits-all situation. It’s like judging a movie solely based on the popcorn you eat while watching. What about the plot, the acting, or even the soundtrack? NPS can only give you one thing, and you’re often left with just a popcorn score.

Split Personalities

Your users can be both Promoters and Detractors at the same time, depending on who they’re recommending your product or service to. Think of it like this: are you likely to recommend a holiday destination to all your friends equally? If it’s a lively destination with foam parties and all-night clubbing, then sure, some might love your recommendation. But those looking for a peaceful and family-friendly place probably won’t. This clearly impacts the NPS your user is giving, and your score might be off because of it.

Just a Score in a Vacuum

Now you’ve got your NPS from your survey – let’s say it’s 41. What does that mean? Is that a good score? Mediocre? Or even worryingly bad? How did your competitors score? Did they even use the same methodology? This exercise has now turned into a game where you’re unsure if you’re winning or losing. The limitations of working with arbitrary numbers only bring more questions, confusion, and problems. In the end, you won’t get any qualitative insights that help you make real improvements.

A Starting Point, Not the Finish Line

Analyzing your NPS is a bit like trying to read a book by only going off the back of it. It might give you an idea of what the book is about, but to truly get the full story you need to properly dive in. NPS is just the tip of the customer feedback iceberg, and you need to combine NPS with other mechanisms to get the answers you were hoping for.

Actions Speak Louder than NPS Numbers

Knowing your NPS alone won’t magically fix any of your problems either. You need to make something useful with it. You need to get involved when looking for answers, and you need to look with purpose.

Do you want to measure and drive word of mouth, or is it retention that you’re after? They mean different things for NPS.

You need to take the feedback and try to find patterns. Look deeper, find the issues, and make actionable plans for them. That’s how you can start to make real improvements – how Detractors become Promoters.

So, NPS Is Not That Good – Now What?

Talk to People, People

Pick up a phone. Send an email. Go for an overpriced coffee. And ask questions. 

Talk to your customers at key moments. Why do they buy your service? What are they hoping to get out of their investment? Why did they opt out of your subscription?

Ask your active users what made them buy into your solution in the first place. Where were they when they decided to go with you? Where did the customers hesitate, and when were they convinced?

Every opinion matters – especially those coming from the rage quitters. Exit interviews can be incredibly valuable, as the ones that left you are usually the ones with the most important insights. Since they’re already out the door, they have little to lose and will let loose with brutal honesty.

This isn’t something to be scared of. Take their feedback for what it is and put it in the context of what you set out to find out.

Maybe their annoyances are something as small as the size of the buttons they had to click. Or the software might have been too unintuitive and slow for them to work with. They might have some strange system integrations pet peeve. Or perhaps they simply couldn’t stand that irritating notification sound your product makes?

There are tons of things to learn from just asking. The insights are valuable for your entire business and everyone in the organization should care. From your AEs and CSMs to UX designers and CFOs.

You should always look deeper and understand. You will learn something, and what you find are usually insights you can bring to the board and investors.

Get Your Referrals On

Finding your Promoters can be valuable, as these customers are most likely to refer your business to others. Now you can leverage their positive sentiment by nudging them for a referral of your business. You can do this through personalized programs, discounts, incentives, or exclusive offers. By reaching out to promoters and tapping into their willingness to recommend your business, you can significantly increase the number of referrals you receive.

You also need to make it easy for people to talk about your product. Let your users know what your product does, make your message easy to understand, and then teach them to pitch it for you. PLG expert Leah Tharin touched on this in a previous podcast of ours: “If you cannot explain to me what your product does, how can I explain it to someone else?”

Make your product shareable. Happy users want to share their progress and the work they’re achieving. Let them. They are great ambassadors for you. Prompt users to share their progress and your product within the application itself by connecting it to relevant platforms. You can even have a “Share this with a friend” message pop up at opportune moments.

You can always put the acquisition cost of a new customer in a referral context. Look at your MQL costs from LinkedIn, for example. Once broken down, what you’re paying for a qualified lead on LI is then also your budget for referrals. Your targeting will likely even be more precise than when you pay for the ad.

What’s the Total Score Here?

There’s no way around it – Net Promoter Score has its drawbacks. It oversimplifies the customer experience, it’s easily gamed, and it lacks context and actionable insights.

But, there’s hope. When you combine it with other feedback mechanisms, NPS can provide a starting point for understanding customer perception. Engaging in meaningful conversations, gathering feedback at key moments, and encouraging referrals can lead to improvements.

Did you like this blog post? On a scale of 1 to 10, how likely are you to recommend it?

Our founder Toni talked to Mikkel about NPS and more on this week’s Revenue Formula. Check it out here:

Your CSM supports your customers as they transition from won customers to active product users. They focus on building loyalty and long-term client relationships, and the same rep will often stay with their customers as long as they are with your business.

To separate the CSM from sales a bit, think of it like this: your salespeople get customers in, and your CSM makes them stay with you.

So, why is customer success such a big deal?

Subscription is King

Freemium, pay-as-you-go, and tiered fixed fees are all different subscription models. There are more, of course, and it seems like they’re all here to stay.

Customers are drawn to the convenience and flexibility that’s offered through subscriptions, and they appreciate the hassle-free ways they access products and services regularly. Being able to also easily opt out of their plan if it’s not a good fit only adds to this.

And, from streaming services for $10 a month to dinner kits for $100 a month to B2B software for $100k a year – it is now a subscriber’s world.

Adapt or Die

Instead of panicking, many companies realized the power of subscriptions: they generate recurring revenue.

What these companies need to do now is to find ways to provide consistent value throughout their customers’ life cycle. If they provide a recurring impact, there’s no need for customers to change anything.

Voilà – recurring revenue!

But, just throwing customers onto a complex and difficult-to-understand product might not get them to derive that value. This is a particularly important lesson for B2B software companies.

They might not think the product is effective enough without proper onboarding and guidance. Or that it doesn’t cure their particular headaches. Maybe it’s just an ongoing conversation that’s missing – perhaps even a valuable one, full of important insights?

The sales rep promised them the world, but to realize this value, the user also needs to be able to use the product. And often.

In many cases, your recurring impact comes from one place: your CSM.

And, yes – many will cry out “No! It’s the product!”.

Ok. Sure.

But with complex tools, in particular, you need the other side as well.

This Time It’s Personal

Think of your business as a gym. The salespeople and AEs are the ones making phone calls, sending emails, knocking on doors, and trying to sell gym memberships around town. Their job goal is to get as many new sign-ups as possible.

Your CSM team would be the personal trainers of your gym in this analogy, and their job is a little different. Instead of chasing new customers, they keep track of your existing customers’ progress and help them reach their individual goals.

Just like personal trainers push clients to complete that extra rep or lap, the CSMs keep customers motivated and informed on their progress, and ensure they’re using your product to their full potential.

As your CSM continues to support their customers, they will also get a deeper understanding of and can tailor their services better. Now, armed with greater knowledge, they can provide even more accurate coaching and advice for the customer and trust is built.

But your CSM is not merely selling. They understand their customer’s needs now and can give better advice. The addons, payment plans, package upgrades, or consultancy services they suggest are all things that will make a difference for the client.

And any success they have will be a shared one, as finding the right solutions at the right time will only strengthen the relationship further.

Understanding how to best work with your Customer Success and subscription offers will help you create better scalability. What’s more, being able to prove a recurring revenue will be attractive to any potential investors.

And speaking of subscriptions… don’t miss out on joining our founder Toni on Substack, where he shares his thoughts on B2B SaaS (and occasionally other things).

Punchy and controversial headline? Check.

Muddy acronym to keep amateurs away? Check.

Reader hooked for a few leisurely minutes? Check.

Great.

Let’s start with what CAC stands for.

This is your Customer Acquisition Cost; how much you spend to convert new customers. You get this number by adding up all your costs to acquire new customers over a certain time period. Those costs will most likely be your Sales and Marketing expenses for the period.

Tada – there’s your CAC!

This approach is simple enough, but the problem is that there’s no universally accepted way of approaching and calculating CAC. And, if you think about it, that kind of makes sense – all parameters just aren’t equally important for all businesses.

CAC isn’t a properly “audited” number that is regulated – it’s simply a made-up metric.

The problem with this is that it then lets everyone tweak their CAC numbers to their advantage. Some will leave out counting sales reps that aren’t fully ramped yet, or people that were let go. Others might argue that Recruiting Costs should not be part of it at all. A third one takes it to the extreme and even adds partial rent and lunch expenses. A fourth might add CSM costs or Account Management to the total.

To make matters worse, in many cases these calculations are simply “wrong”.

Because of this, the metrics of CAC are very, very flexible.

“Is It Loaded?”

So then by default, CAC is something of a loose metric, and an investor asking “Is the CAC fully loaded or not?”, is not at all uncommon.

The reason why they’re curious about this is that people tend to get hyper-creative with their CAC, and like to take things out of it, rather than putting anything in. The “Fully loaded question” is testing you on this – they’re really asking “How much did you fiddle with this number?”.

But your CAC troubles won’t stop there.

Once you played around with the CAC definition, now you are asked to use it for CAC-to-LTW, or some other metric, and – you guessed it – all of it will be completely useless and the whole thing won’t make sense anymore.

Ok, but let’s say you’ve managed to figure it out and you now have a solid, clean CAC definition.

What do you do with it? What can you do with that number?

Is it a good thing to have $10M CAC or $100M CAC? And even if you break it down per customer, does it actually tell you anything other than that one company has 10k CAC per customer and another one has 100k in CAC per customer?

Honestly, your CAC is not particularily useful by itself.

The Superior Key Metric

Instead, you should be looking at your CAC Payback, also known as your break-even point. This is the time it takes the company to recoup its spending. Intuitively, the shorter the Payback period – the better the business is doing.

Determining your CAC Payback is better for more than one reason.

Firstly, it shows you the true efficiency of your sales and customer acquisition. Getting those numbers will then enable you to reallocate funds into growth plans and even more customers.

The value in finding your CAC Payback is that it gives you a metric that’s comparable to others, and your CAC is no longer floating around in some vacuum.

Longterm, you should even aim to break down your organization into tiny little CAC Payback streams and get an even better understanding of their efficiencies. Once you do this, you can actually now start using your CAC Payback as an actionable metric.

Is your CAC Payback the highest in the US? 

Or at its highest in your Outbound? 

Or even Outbound within the US?

These are insights you can use and plan around. Maybe you want to make a big play for the US market? Then this is the way to go.

But if you are actually worried about cash and are trying to find the cheapest ways to grow, well then just steer your budget away from the expensive stuff, and move towards the cheaper ones.

Much smarter, right?

CAC by itself is not very reliable, but its cool cousin CAC Payback is the sort of friend that will help you move, come pick you up at the airport, and actually give you real help in running your business.

Toni and Mikkel talked more in-depth about why “CAC is caca” in our podcast The Revenue Formula. When you want to learn more, you find it right here:

“So, where do I begin?”, I asked myself. 

On my first day here at the office I felt a little lost. Funnels, flywheels, and bow ties were apparently some very important models? I was also immediately peppered with a million acronyms in SaaSian short-speech. ACVs and CVRs. BOFU, MOFU, and TOFU. And then onto NDR, SAL, and TAM. 

What was I thinking?

The most sought after positions on the job market right now are within RevOps, so I imagine there are other people feeling the same things as me: starting a new job at a B2B SaaS company in RevOps is very exciting, but it can also feel somewhat overwhelming. 

There are a lot of great blogs and people to keep tabs on, of course, but I learn best from listening. I’ve gathered up a list of Podcasts and thought I’d share it with you. Maybe it could be just what you’re looking for, or maybe this is just the thing for that person starting on Monday?

1: OG Ops Podcast

Launched at the start of the year, the OG Ops Podcast invites people that are actively working in operations to share their stories and lessons learned – all expertly hosted by Jordan Henderson and Brandon Redlinger.

Why it could be for you: The conversations are relaxed and non-scripted (but still tightly packed with insights), and their less-than-dead-serious tone is inviting and entertaining.

A good place to start is:

2: B2B SaaS CEOs

Josef Fallesen of Vaam hopes to be the world’s best B2B SaaS CEO one day. Cunningly, he uses the podcast B2B SaaS CEOs as his vehicle to get there. Join him if you’re into picking the brains of inspirational leaders and entrepreneurs.

Why it could be for you: Even if you’re not aiming for boardrooms or shareholder meetings, the episodes are chock-full of important insights and lessons from small startups that made it big. Crispy, Scandinavian accents and brilliant minds – What’s not to love? 

A good place to start is:

3: RevOps Therapy

Listening in on Revops Therapy and the guests of the show will give great insights from skillful revenue operators and their different work processes. You hear about the lessons they’ve learned, which pitfalls to avoid, and why data is king.

Why it could be for you: Inspirational people armed with wonderful storytelling and interesting perspectives from every corner of the SaaS world. 

A good place to start is:

4: FINITE: B2B Marketing Podcast for Tech, Software & SaaS

For your shorter commuting needs, the FINITE: B2B Marketing Podcast for Tech, Software & SaaS could be just the thing. This show invites (mostly) marketing guests to talk about trends, growth, and marketing in the SaaS sphere.

Why it could be for you: Short, sweet, and to-the-point. All episodes clock between 20 and 30 minutes, and each show is focused on one specific issue. Handy!

A good place to start is:

5: Predictable Revenue Podcast

Purpose-driven prospecting, how to get limitless leads, how to get your customers to trust you – AND MORE! All in the Predictable Revenue Podcast .

Why it could be for you: There’s a patience in the way host Collin Stewart cajoles the nuggets and truths from his many successful guests. Thanks to both format and tempo, the flow of the episodes is inviting, and they’re conveniently snack-packed in less than an hour.

A good place to start is:

6: The SaaS Podcast with Omer Khan

Founders, bootstrappers, and proven SaaS know-it-alls take turns filling the episodes of The SaaS Podcast with Omer Khan to the brim with insights, lessons, and stories from the industry. 

Why it could be for you: The guests share their own journeys with intimacy, and both failures and successes are happily discussed. Khan lets the conversation ebb and flow, which makes the episodes feel like chats between old buddies, rather than a court hearings.

A good place to start is:

7: Reveal: The Revenue Intelligence Podcast

Here’s an established podcast for all your data driven B2B needs. Reveal: The Revenue Intelligence Podcast invites guests to openly talk navigating through data, instead of opinions. It’s hosted by account-based marketer/genius, Corrina Owens, and GTM enablement wizard Danny Wasserman – both fantastic.

Why it could be for you: The show is well produced, the episodes are appetizingly short, and the content is relevant for anyone living in a Go-To-Market world.

A good place to start is:

8: Startups For the Rest of US

At the time of writing, Startups For the Rest of Us is on its (beastly) episode 666, so they must be doing a lot of things right. The show is heavily focused on SaaS business and their founders, and tells the stories of entrepreneurs, developers, and designers getting their software off the ground and propelled into the stratosphere. 

Why it could be for you: Accessible language and tips for us newbies, a wide catalog on all things startup-related, and inspirational guests with important things to share.

A good place to start is:

https://open.spotify.com/episode/39PJbJX6eHaSnnnCD1eNMj?si=ba57b20d1fee42ea

9: SaaS Sales Players

Always be closing, sure. But first, listen. The SaaS Sales Players is a podcast that’s packed with tips and top seller guests in SaaS. The host and guests share advice and experiences on overdelivering, smashing budgets, and how to soar to the top of your discipline.

Why it could be for you: It’s easy to find relevant episodes, the content is succinct, and the takeaways are plentiful.

A good place to start is:

10: Indie Hackers

Are you curious about how a teeny, tiny, terrific idea can grow into a profitable online behemoth? Then Indie Hackers could be just your thing. The rising (and already risen) stars of the business explain the tools, strategies, and philosophies you should put to use in your work.

Why it could be for you: What they talk about on the show is serious business, but how they do it is entertaining – not a bad combo.

A good place to start is:

11: B2B Better

If you’re in the need for B2B content, then look no further. The B2B Better is a podcast full of industry experts spewing wisdom. Whether you’re looking for answers in CRM management, GMT strategies, or finding the targets that matter to you, you’ll get some great ideas here. 

Why it could be for you: The conversations all have authentic flows and generate true and important takeaways, so it should be worth your ear time.

A good place to start is:

12: The Revenue Formula

If you’re curious about what our founder (aka. my boss) here at Growblocks has to say about crushing QBRs, the challenges of GTM, and much more. The Revenue Formula is growing fast, and it’s actually really good (I’m not forced to say that).

You find all episodes here, have a listen →

At its core, Revenue Operations (RevOps) is not just a buzzword or a fleeting trend. It’s a transformative approach designed to drive efficient, scalable growth across organizations. But what exactly does it entail?

Imagine you’re the captain of a ship, charting a course through the vast ocean. Your goal is clear: reach your destination as efficiently and safely as possible. In this analogy, Revenue Operations is the compass, map, and the skilled crew that ensures your ship navigates smoothly, avoiding obstacles and optimizing its route for speed and efficiency.

Defining Revenue Operations

Revenue Operations is a strategic alignment of sales, marketing, and customer success operations across the entire customer lifecycle to drive growth through operational efficiency and keep all teams accountable to revenue. It’s about breaking down silos and fostering collaboration among departments that traditionally operated independently.

This alignment is crucial. It ensures that every team is working towards the same goal: maximizing revenue. By streamlining processes, improving communication, and leveraging data analytics, RevOps empowers businesses to make informed decisions that boost their bottom line.

Key Components of Revenue Operations

Understanding the key components of Revenue Operations is like assembling a puzzle. Each piece is crucial, and when they fit together perfectly, the bigger picture comes into focus. Let’s delve into these components.

1. Data and Analytics

Data is the lifeblood of Revenue Operations. It provides the insights needed to make informed decisions, identify trends, and measure success. Analytics tools help in interpreting this data, turning raw numbers into actionable insights.

For instance, by analyzing sales data, a business can identify which products are performing well and which are not. This insight allows for strategic adjustments to marketing campaigns, product development, and sales strategies.

2. Process Optimization

Efficiency is key in Revenue Operations. Process optimization involves streamlining workflows, automating repetitive tasks, and eliminating bottlenecks. This not only saves time but also reduces the likelihood of errors and improves overall productivity.

Imagine automating the lead qualification process using AI. This not only speeds up the process but also ensures that sales reps are focusing their efforts on leads most likely to convert.

3. Technology and Tools

The right technology stack is essential for effective Revenue Operations. From Customer Relationship Management (CRM) systems to marketing automation tools and analytics platforms, these technologies enable businesses to manage their operations more efficiently and gain deeper insights into their performance.

Choosing the right tools is crucial. They should not only meet the current needs of the business but also be scalable to accommodate future growth.

4. Alignment and Collaboration

At its heart, Revenue Operations is about fostering alignment and collaboration across departments. It’s about ensuring that everyone is working towards the same goals and that communication flows smoothly between teams.

This alignment is facilitated by regular meetings, shared goals, and integrated planning sessions. It ensures that marketing campaigns are in sync with sales efforts and that customer feedback is quickly relayed to product development teams.

5. Continuous Improvement

One of the hallmarks of successful Revenue Operations is a commitment to continuous improvement. This involves regularly evaluating processes, analyzing data, and seeking feedback from teams to identify areas for enhancement.

By embracing a culture of continuous improvement, businesses can stay agile and adapt to changing market conditions more effectively. It’s about being proactive in optimizing operations rather than reactive to challenges that may arise.

The Impact of Revenue Operations

The impact of implementing Revenue Operations can be profound. It’s like turning on a light in a previously dark room. Suddenly, inefficiencies become visible, opportunities for optimization are identified, and the path to growth becomes clear.

Increased Efficiency and Productivity

By streamlining processes and leveraging technology, businesses can significantly increase their efficiency and productivity. This not only reduces costs but also allows teams to focus on high-value activities that drive growth.

Improved Customer Experience

A well-oiled Revenue Operations machine ensures that customers enjoy a seamless experience from their first interaction with your brand to post-purchase support. This not only boosts customer satisfaction but also increases the likelihood of repeat business and referrals.

Enhanced Decision-Making

With data at its core, Revenue Operations provides businesses with the insights needed to make informed decisions. Whether it’s identifying new market opportunities, adjusting pricing strategies, or optimizing marketing campaigns, RevOps ensures that decisions are data-driven and aligned with business goals.