There’s an old saying that “how you finish is more important than how you start”. In the world of sales, marketing, and customer success it’s both true and not true at the same time. How you start is very important because without generating leads and correctly identifying interested buyers, your business will essentially cease to exist. There is no finishing strong if the starting never happened.
On the other hand, finishing strong is really where the money is made; it’s what separates the businesses that just get by from year to year from the ones which grow from year to year. It’s one thing for a customer to buy a product or service one time and pay the accompanying fee. It's quite another thing, however, for that customer to buy that product or service and either continue to renew their subscription to it or upgrade and then tell others about it.
When you have turned your customer into a repeat buyer or engaged in upselling/cross selling, you have finished the sale strong. Welcome to the world of net revenue retention! It’s not as easy as it sounds though, and you might just need to bring in an expert to help.
Why RevOps as a Service?
If RevOps is the new kid in town, RevOps as a service is the even newer kid in town. “RevOps” has been lighting up Google search engines over the past couple years and any business serious about exponential growth has been doing their due diligence to see if they’re maximizing their revenue in a repeatable fashion.
For those businesses without a team of in-house RevOps experts (hint: most), RevOps as a service is a wise choice. It’s a new concept, but put simply it is when a business contracts out their revenue operations strategies to a company with an expertise in RevOps.
Why is it a good idea?
- Saves money: Less expensive than hiring your own full time team of RevOps wizards
- Peace of mind: Relax, your most important business functions are being carried out by pros
- Alignment: Sales, marketing, and service teams have common goals (no operating in silos!)
When it comes to the most critical part of the sales process, generating recurring revenue, amateur hour isn’t gonna cut it. If you don’t have an in-house team of RevOps-trained professionals, seek out a company which specializes in RevOps as a service.
When you turn over your revenue processes to a team of RevOps experts, here are some examples of areas they may look at while mapping out your strategies:
- Net revenue retention
- Lead Scoring
- Forecasting and goals
- Sales stages
- Lead status
- Sales sequences
- Customer lifecycle stages
Let’s take a look at net revenue retention, and see how it might be tackled by a team of RevOps pros.
Net Revenue Retention
What is it? Why is it Important?
Net revenue retention (NRR) is a metric that measures recurring revenue generated/retained from your existing customer base over a set period of time. Because there may not be an unending supply of potential new customers interested in your specific product or service, it is vital that current customers are not one and done with you.
Net revenue retention can be used to assess sustainable business growth, which relies on retaining and growing existing customers, and it:
- Helps track how healthy your business growth is
- Ensures all deal data in HubSpot is 100% accurate
- Helps track customer changes over time
For all the “hey, just give me the numbers” people out there:
- A 5% increase in customer retention results in 25-29% increase in revenue
- Customer retention has been shown to increase profitability by 25-95%
Calculate Net Revenue Retention
Don’t let the cute, colorful squares fool you, it’s easy to mess this process up. If your team isn’t RevOps proficient, this is definitely one area to outsource to the pros. Research the best companies for RevOps as service (hello, RevPartners) to optimize your customer retention practices!
When/Where Does it Occur?
When it comes to developing net revenue retention, a team of RevOps experts will often work in phases.
Phase 1 will often include:
- Data audit: confirm all deal data past and present
- Complete data export: completed export to confirm what needs to be updated
- Create data import file: confirm data needed for future imports
Phase 2 gets into the actual processes:
- Bi-weekly meeting
- Add data to import file
- Import subsection of data
- Repeat steps above until data is 100% accurate
- Build Export File
- Build Spreadsheet with NRR formulas
Phase 3 wraps up with:
- Complete first export
- Calculate NRR for first data step
- Repeat steps each month
When your RevOps as service team has put all net revenue retention processes in place, you can expect all deal data in HubSpot to be 100% accurate and codified correctly, a standardized report file from HubSpot to be dropped into a spreadsheet each month, your spreadsheet formulas will automatically calculate new time period’s net revenue retention once exported into it, there will be an ability to track overall net revenue retention and changes by revenue category for each time period, and that net new, renewal, upsell, and churn processes are being followed by entire team.
We Put the REV in Net REVenue Retention
Customer retention is essential for a business to undergo exponential growth. Having a great product or service is a good start, but it’s only part of the equation. You need solid plans and processes in place to convince your customers not to look elsewhere. If your in-house team isn’t equipped for this, use RevPartners to help you finish the sale strong!
We’re the go-to for RevOps as a service!
If you want to go fast but never miss a turn, then contact us!