4 Metrics to Help You Drive Revenue Growth

Hit a growth wall? RevOps could help you find the answer.

Companies that want to scale effectively need more than just great products and people—they need a streamlined and comprehensive approach to driving revenue growth. 

RevOps, or Revenue Operations, is emerging as a framework and a process for companies aiming to grow efficiently. But what is RevOps, and how can businesses implement it to successfully drive growth?

What is RevOps?

Revenue Operations (RevOps) is a framework that aligns sales, marketing, and customer success functions, creating a unified approach to revenue generation and optimization. At Ballast, we layer finance and accounting into the standard RevOps framework for improved clarity and accountability. 

Unlike traditional approaches where these functions operate in silos, RevOps consolidates them into a cohesive framework, making it easier to monitor, analyze, and improve the levers for growth. By coordinating and standardizing these efforts, businesses can gain actionable insights and drive more predictable and sustainable growth.

How RevOps helps you grow and scale

When implemented effectively, RevOps enables companies to make data-driven decisions more accurately and quickly, manage their costs better, and scale operations in a largely predictable way. Instead of reporting information in silos, the sales, marketing, delivery, and finance & accounting functions report information into a single framework to understand the flow of leads, the addition of clients and projects, and spend in various categories. This allows for a more comprehensive understanding around the costs to acquire customers (CAC), the value of a client or customer over a period of time (lifetime value or LTV), and capital efficiency.

RevOps as a framework isn’t new. It comes from the tech/SaaS world. But it applies to all companies interested in growth. And it’s surprising how few of them (even in the tech space) are using this model effectively. Additionally, what we have identified is that most RevOps frameworks do not tie directly into the financials of the firm – they’re tracked outside by the marketing departments or sales teams and often are not rooted in the actual, reported financials of the firm.

Even if you’re familiar with the RevOps concept, we encourage you to walk with us through this topic. We have used this framework for many businesses, even very successful ones, and every time we’ve identified and uncovered insights that have led to improved decision making. Even experts in growth can miss out on critical elements of a well built RevOps framework and process, most especially when it isn’t tied directly into the financial reporting functions of the firm.

Steps to building a RevOps reporting function within your business

Here’s a straightforward (albeit not always “easy”) and tested step-by-step approach to set up RevOps reporting, allowing you to track and optimize your revenue generation efforts:

1. Capture advertising, sales, and marketing spend separately from other spend

Start by organizing your Chart of Accounts (COA) to categorize sales and marketing related expenses separately from other spend buckets. Split payroll spend into the various buckets and be sure to split the sales-related payroll into the sales and marketing spend category. (Note that most early-stage firms group all payroll, regardless of activity, into a single expense line.) 

Next, be sure to capture non-payroll related sales and marketing expenses accurately.  We recommend using a platform like Ramp or Bill.com. This setup ensures you have visibility into your sales and marketing spend, which are crucial inputs for calculating your CAC.

2. Implement a time-tracking system 

We know, we know. Nobody likes tracking time. But time-tracking data isn’t about micromanagement – it’s actually crucial to understanding the internal costs associated with sales efforts. Yes, it can be a pain initially, but this insight is invaluable. 

Systems like Timely or Harvest can simplify the process, helping you track time and determine the true costs tied to your team’s sales and marketing activities. Use this system to accurately capture all of the labor costs associated with sales and marketing that might not be captured by the above sales related payroll expenses. Examples include the time of other team members from other parts of the business that are pulled into a sales process. Or perhaps the CEO and other general & administrative (G&A) related personnel are involved in sales, but because their payroll costs are captured in G&A, you’ll miss the trust cost of sales spend.

If you absolutely hate the idea of implementing a time tracking system, you can kick off a RevOps assessment and ongoing reporting process by simply using an estimate of the cost of the time from non-sales and marketing groups within the firm that should be applied to the total sales cost bucket.  We recently used this approach with a client and it suited their needs just fine to get this process off the ground. 

3. Use a funnel management tool

Tools like HubSpot can help you manage your sales funnel, tracking qualified leads and closed deals. Every month, monitor new deals added to your funnel, as well as the deals closed. Understanding your close rates and deal velocity (how long it takes to close a deal) will provide critical insights into your pipeline health. The trick here is to design stages within the funnel that accurately represent your sales process and your stages of a sale.

4. Define your deal unit

Determine the unit you’ll track for a deal – for some businesses, this may be new clients or logos, for other businesses perhaps a deal means a new project. Some businesses use both, but run them separately in two or more distinguishable funnels.

Next, define ‘deal value,’ or what you will enter for the deal value. Examples include monthly recurring revenue (MRR), or annual contract value (ACV).  

5. Calculate your Customer Acquisition Cost (CAC)

Take your total sales and marketing spend over a period, say a trailing six months, and divide it by the number of new deals landed within that period. This gives you your CAC – the cost to acquire each customer, client, or deal.  People can get cheeky here by renaming CAC for the use case of their business, but we just call it CAC regardless of if it’s a project acquisition cost or a client acquisition cost.

For example, if you spend $100k each month on sales and marketing and you land 40 clients over a six month period, your CAC would be $15k.

The slower your deal velocity, or the longer it takes you to convert a lead into a closed deal, the longer the time horizon you’ll want to use to capture the above information. For some clients, a trailing three month is sufficient, for others we have to go as far back as twelve months due to long sales cycles.

6. Determine Deal Value or Customer Lifetime Value (LTV)

For recurring revenue businesses, calculate the life cycle of each unit by figuring out the average tenure of clients. If your business operates on a project basis, it’s simpler to assume no tenure so the deal value is simply the project deal value. Tech/Saas firms like to calculate deal value or LTV using gross revenue. But at Ballast, we very much prefer gross profit. See below for some examples:

For recurring revenue businesses, calculate LTV this way:

• Figure out the average tenure/lifespan of your client - say 32 months for example

• Multiply month tenure by MRR (Monthly Recurring Revenue) per client - say $5,000 for example

• Then further multiply it by average gross profit margin - say 40% for example

• In this example, your LTV would be $64k ($5k x 32 months x 40%)

If your business operates on a project basis, calculate deal value this way:

• Calculate the average project revenue

• Multiply by average project gross profit margin

7. Track your key metrics: CAC, LTV, LTV/CAC Ratio, and CAC Payback

Each month, monitor the following:

8. Plan for the future

Use your data to plan the next six to twelve months. Outline your spending goals, inbound lead targets, close rates, and expected deals closed. This enables you to create scenarios for growth, setting your organization up to adjust and improve over time.

Remember: This takes a bit of elbow grease – but it’s worth it

Building a RevOps framework is not a complex endeavor, but it does require diligence. The challenge often lies in gathering data from disparate systems and setting up a consistent process. 

However, the benefits are substantial: by using RevOps to track and optimize your revenue operations, you gain clear visibility into the metrics that matter and set up your business for strategic, scalable growth.

Don’t be afraid to ask for help

If you are having trouble with RevOps, it’s worth it to ask for help. At Ballast Consulting, we’ve helped dozens of clients implement RevOps reporting functions to break through growth barriers and start scaling. Our team specializes in translating financial data into actionable insights, creating reliable pathways for growth.  For us, RevOps is simply an extension of what we’ve been doing for years. 

If you’re ready to build a RevOps framework that fuels systematic and sustainable growth, reach out to us. We’d love to help you navigate the process and maximize your revenue potential.