subscribed 2016: metrics that matter - an operational framework for running your subscription...
TRANSCRIPT
Metrics that Matter
An Operational Framework For Running Your Subscription
Business
Ben KwonVP Field Strategy
…What are they and how do you operationalize across your entire company?
Focus on the CustomerCenter on Annual Recurring Revenue
Enter PADRE , the framework.
P A D R E
P P M
Executing against the Subscription Business Model
Pipeline How do you drive pipe?
How much do you need?
Quality vs. quantity
How long does it last?
PipelineHow do you measure your Pipeline
Web Visits
IB Leads
New S1 Pipeline
S2 Accepted
Bookings
RatiosTotal to
UniqueWeb to IB
Leads
IB Lead to IB Opp
S1 to S2
Win Ratio
%
%
%
%
%
PipelineWhat does your Funnel look like? Quantity? Quality?
vs
Pipe Target = 5x of Future Quarter
PipelineAre you set up for Success?
PipelineDo you have enough Coverage?
PipelineWhat is the right coverage ratio for your business?
1.0x-2.0x
2.1x-3.0x
3.1x-4.0x
4.1x-5.0x>5.0x
12% 47% 24% 10% 7%
AcquireHow do you structure and model your Sales Org?How do your measure effectiveness?Do you have a predictable businessHow do you incentive behavior?
Sales team segmentation stack rank:
Industry Verticals31%
Customer Rev26%
#Employees21%
AcquireHow do you organize?
10 days
4%30
days16%
60 days
32%120 days
29%
19%
AcquireHow do you model your sales cycle?
ACQUIRE: Does your sales cycle vary by segment?
Average Days to Close
AcquireHow does your sales cycle vary by segment?
30 days 60 days 90 days > 4 mos21% 24% 41% 14%
AcquireHow do you model ramp time?
Management Layers Type
AcquireHow do you run your Forecast process?
Win Rates by Stage
Stage 1Qualificati
onStage 2
DiscoveryStage 3 Demo
Stage 4 SOW
Stage 5 Price
Stage 6 Contracts
Enterprise 5% 10% 25% 50% 70% 95%
Mid Market 5% 15% 30% 55% 75% 95%
Commercial 10% 20% 35% 65% 85% 98%
EMEA 5% 10% 25% 50% 70% 95%
APAC 5% 10% 25% 50% 70% 95%
AcquireDo you have a predictable sales process?
19%
18%
47%
15%
MRRTCVACVOther
AcquireHow do you incentivize your sales organization?
DeployProfit or break even?What KPI’s should your Services team be accountable for?Alignment between Sales and Professional Services
Internet Of ThingsTechnology Consumer
Goods
implementation shipping
Implementation &
shipping
DeployDifferent metrics for different industries
real-timeimmediatefulfillment
preserves cash
Internet Of ThingsTechnology Consumer
Goods
Deploy…but with the same targets
DeployKPI’s can be…
ModernTraditionalRates per hour
Utilization ratesBacklog
Returns / defects
Time to Go-LiveCustomer attachment / adoptionFree service periods offered
Run / ExpandChurn is the achilles heel of any Subscription businessWho owns renewals?New usage, divisions, products as Upsell strategyCustomer Support vs Customer Success
15%Monthly
4%Semi-Annual 73%1-2 years
> 2 years 7%
Contract Terms
RunAre your customers committed?
Customer Success;
55%Sales;
33%
Other; 12%
ExpandWho owns Renewals?
Upsells are important – over40% 20%
>60%14%
of companies generate more
than
of their bookings from upsells
of companies are changing pricing At least annually
Only every 3 years
Sales reps are the key – companies generating higher upsells assign reps to manage
ExpandWho owns Renewals?
Cohort analysis provides significant insight into trends
ExpandManaging and measuring churn
PADRE Summary
PADRE
Conclusion
Build an operating framework that is aligned to your corporate objectives with metrics that center around the customer relationship.
Meet our Panel Members
Ron ShahCFO & COO
Aaron BrinkerSr. Dir Strategy & Operations
Jake RandallVP, Business Operations
Check out Zuora Academy for more great info and actionable advice.
All the info you need to build and run an amazing subscription business.
https://www.zuora.com/academy/