In our third episode of RevOps and Hops, we float down the San Antonio River. We also welcome Scott White, the newly minted CRO of Chargify, to discuss the rise of RevOps. And what better way to discuss it than over a cold New England style IPA, Cloud Surfer, from Trophy Brewing Co., and the sound of a babbling brook in the background.
- Scott has a methodical approach to RevOps at Chargify.
- Customer outcomes somewhat interchange with the idea of RevOps.
- Customer outcomes—the success your customers are having because your product is having an impact on their business, in turn, providing the revenue.
- Get your product and engineering team to buy into the importance of RevOps by showing them the impact their work has on the customer.
- Although sales, marketing, and customer success teams are hitting their goal, it doesn’t always mean the business is.
- Align each team with the same goals.
Scott’s background is in customer-facing roles from sales, marketing, and customer success—the perfect candidate for RevOps. Scott has spent 18 years at Rackspace, helping build the company from 50 to 6,500 employees. He has seen a lot of changes and evolution in the SaaS space so it makes sense that we get the scoop on what he has learned from those changes.
Scott says, “There are things that you learn during those experiences that you didn’t realize you were learning.” RackSpace grew 70% year over year for 10 years and when growth like that happens, you end up being forced to do things you don’t know how to do and adapt. The unofficial motto of the company at the time was, “Go make it happen. If you mess it up, fix it, make it right, and keep moving forward.” For Scott it wasn’t about building a multi-billion dollar company—it was about serving customers and delivering great customer outcomes.
What are CROs?
CRO’s have derived from revenue materialization. Delivering great customer outcomes, and growing businesses have become more complex. Scott harkens back to the day of managed-hosting services. It was pretty simple. It was a subscription model, you bought one “flavor” of a server and you paid for it each month.
Forecasting, churn analytics—you name it—were very easy to manage. But now, it’s about managing the entire revenue process and thinking about how to monetize products. How do you go to market from a marketing perspective—positioning, how to sell, and of course keeping customers happy? Not to mention, the process you put in place for everything.
What to focus on
How do you differentiate yourself as a RevOps leader if your background is in sales or marketing? How do you best prioritize?
For Scott it’s a good set of analytics that gives him a view of the business to see what’s working and what’s not. The key is to be well rounded and have the skill set to tackle the challenges of each internal organization. Now, those can vary from not enough Marketing Qualified Leads (MQLs) to sales reps not turning Sales Qualified Leads (SQLs) into opportunities. It’s crucial to set targets based on industry or with what’s happened in the past, in hopes to improve upon it.
CROs didn’t exist 10 years ago
We all are aware that job titles with the word revenue in them have grown exponentially throughout LinkedIn over the past several years. It goes back to the way businesses and people consume software. Ten years ago, SaaS was just finding its feet. It was a simpler time and revenue came from one place. Today, we see Chief Revenue Officers are most prevalent in B2B software companies because that’s where the complexity lies.
Some challenges a CRO faces include: the trial process, positioning yourself to customers, and what features become gated vs. accessible to everyone. These are all difficult and strategic decisions that deal directly with revenue. Scott mentions he’s been in a position where his sales, marketing, and customer success teams hit their targets, but the company did not achieve the outcome it was looking for. And although, singularly, each team achieved their targets, the company did not.
Scott explains it’s all about aligning those teams to achieve a common outcome and understanding what those metrics mean. “One of the secrets to this is aligning people on what these metrics mean… aligning what people believe in to get the outcome we are looking for.” SaaS companies are valued on revenue growth, and if they’re not achieving that growth, they won’t be worth that much.
Scott’s first 90 days at Chargify
For someone like Scott, his first 90 days at a new organization is all about being in watch mode, evaluating what’s going on, and learning. He’s coming in with a different skill set to a company that he only knows from an outside perspective.
With Scott in place, Chargify is officially implementing RevOps, but what does that look like?
It begins with looking at what metrics they want to measure and manage, as well as the day-to-day analytics they look at to run the business. “The first step to revenue growth is delivering great customer outcomes,” and that’s what Scott is looking to achieve first.
A lot of the role will consist of influencing people to get the outcome Scott wants. First and foremost he wants the company to be centered around serving the customers, including reporting results and what is discussed on a daily basis.
A great example is a support team. They don’t necessarily have an incentive when it comes to revenue, but the daily interactions with their customers and keeping them happy, has a tremendous impact on revenue. Those great relationships lead to renewals—a direct impact on revenue. Scott tailors his message to each team around what they care about and he then ties that to revenue growth.
Get engineering and product to buy into revenue growth
Engineering and Product are also not directly connected to revenue, at least in their eyes. So how do you get them to see that they are?
Scott explains it’s providing the feedback and letting them know how the customer is consuming the product. For the product team, it’s helping them understand what they need to prioritize in the building and improvement process. When it comes to engineers, it helps to put a face to what they are doing and show them what their work is actually achieving for the customer.
One of the best ways to tie revenue, customer happiness, product, and engineering together is customer feedback. The ability to take feedback and turn it into a feature that directly impacts the customer is a great way to directly tie that win back to revenue.
Customer outcome = revenue
You can have revenue growth in the short term without great customer outcomes. In the long term, if you want to create a sustainable business, you have to focus on customer outcomes and how that connects to revenue. A lot of CROs are sales-focused and customer success isn’t on their radar. This is not the case with Scott.
Scott believes that the reporting structure is less important than the overall focus of the teams and aligning all teams to the same metrics and goals.
What does a CRO look for in an organization?
Anyone who is on the go-to-market side of business is most excited about growth. If there’s a growth opportunity, a CRO will want to be a part of it. For Scott, he values what market an organization is in, and the people who make up that organization. He wants a team that he believes will be successful, capture the market, and grow over time.
One of his first hires would be someone in analytics, who could help him dive deep into the business. “The easy thing is to come in and start doing things. The hard part is being patient and learning the business.”
The need for a CRO
For Scott the marker is $100k a month in revenue, at that point the CEO starts to have different problems to solve. This is the point at which an organization needs to consider a revenue-dedicated person and it’s the right time to move away from manual billing.
They also need to consider marketing analytics. As you scale, you’re driving more traffic to your website. You want to understand where people interacting with your content are coming and going from. Another benchmark is adding a CRM, like Salesforce, into the workflow to really recognize and register that revenue, and understand what’s happening to leads. RevOps leaders need the right tools to be successful.
What is the ideal relationship between marketing and sales?
Scott believes that both teams have an agreement on what success looks like. They’ll have overlapping metrics, and ideally marketing would care about how MQLs get all the way through the funnel. At the same time, the sales team needs to care about how they are converting MQLs to SQLs.
Should customer success have a quota?
In short, Scott says yes. He goes back to driving the right customer outcome. The quota; however, needs to allow them to do the right thing for customers, but also always have the company’s best interest in mind.
Patrick Campbell is the Co-Founder and CEO of ProfitWell, the industry standard software for helping companies like Atlassian, Autodesk, Meetup, and Lyft with their monetization (through Price Intelligently) and retention strategies. ProfitWell also provides a turnkey solution that powers the subscription financial metrics for over fourteen thousand subscription companies (it’s free and plugs right into your billing system). Prior to ProfitWell Patrick led Strategic Initiatives for Boston based Gemvara and was an Economist at Google and the US Intelligence community.