Recently, our CEO, Jason Reichl, was part of a panel at Insight Squared’s Ramp event in Boston. The focus of the panel was whether or not your company’s tech stack is driving you towards RevOps, and one point that Jason really stressed was the importance of knowing not only what problems your organization is facing, but what they mean and whether you should be acting upon them.
Maybe it sounds a little counterintuitive to say that sometimes problems exist within a business but don’t necessarily require an immediate solution. However, if operators spend their energy singling out every issue that arises, they are much more likely to lose sight of the bigger picture, and the problems that are truly hindering the company’s ability to maximize revenue.
Additionally, knowing what your operational problems mean in the context of your success metrics will allow you to focus on the root of these issues as opposed to getting weighed down by the particulars of how these problems manifest.
In Revenue Operations, the way we evaluate both success and failure is using a framework we call 3VC. It stands for Value, Volume, Velocity, and Conversion, and it provides an easy way to measure the impact of either an initiative or a shortcoming. It allows us to prioritize work and categorize problems, all by the same metric: revenue impact.
By looking at industry benchmarks, you can identify the problems that matter most to your business; the ones that are negatively affecting things like the LTV of your customers, deal size, number of qualified leads, length of your sales cycle, and conversion rate. Looking at operational problems in this context, you can frame them in a more productive way. For example, “We need additional head count to solve this problem,” versus “Nobody's following up the right way.”
One thing we’ve seen operators do is attempt to solve every single problem within their business at once, whether it’s by adopting a bunch of new tools or putting process after process in place to deal with every one-off situation. Neither of these things will help your organization in the long run; in fact, they are more likely to hinder your growth.
If you make sure any tool you implement solves a 3VC problem for your company at its current stage, you will avoid overloading your tech stack with tools you don’t really need. With that, we’ll leave you with some wise words from Jason, during his panel at Ramp:
“I would say that the most important thing about tools is to understand the vocabulary of the tool before you try to learn how to operate it. If you're going to do ABM, what does engagement mean and how does that work? You don't actually need the tool first; if you understand all the vocabulary to it, what you can then do is figure out what's right for your organization. I'm a big believer that businesses are inflection points and tools serve the inflection point, not the business. So what is the right tool for you right now?”