subscribed 2016: metrics that matter - an operational framework for running your subscription...

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/