Looking back at FY23 and what's in store for the rest of FY24
This week’s newsletter is entirely unlocked courtesy of BoostUp
We’ve all heard that the age of growth at all costs is dead. My partners BoostUp put together their 2024 Trends Report (grab a copy). There’s a ton of insight in here that is worth digging into. For those on calendar-fiscal we’re about to wrap up Q1 and for those on February fiscal it’s a time to shore up that pipeline for the back half of the year.
This week I’ll do a deep dive into their findings and then go into my own soapbox below.
Hungry? Lunch is on BoostUp. Schedule a date and time here.
Sales Forecasting or Pipeline Management top of mind? Have lunch on BoostUp and see what scaling revenue efficiently can look like for you.
The report outlines the shift in strategy for revenue leaders moving away from growth at any cost to a focus on efficiency and optimization in 2024. We are in a paradigm shift. It happened rather quickly as well so for many revenue leaders it can feel a bit like whiplash. I’d also like to point out that we haven’t seen this type of market since 2008 and before that back in 2001. I’d venture to guess many of my readers were either starting their careers or weren’t yet in the workforce.
In short, this is a once in a lifetime opportunity for us Revenue Operators to conduct business in a new environment. I continue to argue that people grow when their back is against the wall.
The grit. The grind. That’s where RevOps shines.
Leaders anticipate flat or declining budgets, necessitating cost optimization, particularly in Sales and RevOps. Challenges include poor process alignment and data quality. Initiatives for the coming year emphasize cost optimization, resource efficiency, and leveraging new channel partnerships. Critical metrics for success revolve around pipeline health, with an emphasis on generation, coverage, and conversion. The report suggests a pivot towards more strategic, data-driven approaches to revenue operations and customer engagement.
Nearly 80% of SaaS startups missed FY23 targets
Oopf. That’s a lot of people missing target.
Where did the money go?
The first takeaway is that 63.7% of respondents said that there was either a flat cap or a decrease to spending on a year-on-year basis. The remaining 36.3% said that they would have an increase. These budgets not only includes technology spend, but also headcount.
The prevailing sentiment last year was that RevOps was the fastest growing profession. But now I’m also hearing that the music has stopped for spending. So what gives?
Personally I think it’s not just RevOps that’s feeling the pinch. CFOs are reassessing the operating structure in light of the new macro conditions. 2023 was a year of layoffs. Several companies such as X (uh… I still call it Twitter) proved that you can cut out middle management and reduce the engineering team to an unthinkably smaller size yet keep the application running.
According to Techcrunch here were the staggering layoff figures:
January: 89,554 employees laid off
February: 40,021 employees laid off
March: 37,823 employees laid off
April: 20,014 employees laid off
May: 14,928 employees laid off
June: 10,958 employees laid off
July: 10,589 employees laid off
August: 9,545 employees laid off
September: 4,632 employees laid off
October: 7,331 employees laid off
November: 6,956 employees laid off
December: 7,159 employees laid off
January 2024: 19,350 employees laid off
To get a budget in this environment simply means the bar has been significantly raised. Functions such as Revenue Operations have to not just ask for resources, but also will have to build convincing arguments for why they deserve resources over other requests.
The problems don’t go away with reduced resources
Call me crazy but the fact that RevOps is under-resourced doesn’t mean that the problems go away! Reducing the amount of water you have access to doesn’t mean that the burning house isn’t still on fire. In fact, it just means that the house will continue to burn!
BoostUp’s report does a nice job of gathering the top challenges faced by practitioners in 2024.
Personally I’m having issues with the first three. I’m sure you have your own issues among this list. If you haven’t seen the RevOps as Command Center article I encourage you to check it out.
With fewer resources in place I think the easiest (yet most difficult answer) choice is to push more working hours onto your RevOps teams (yuck). I’m not a fan of this. We in the RevOps community absolutely need to continue to make stronger investment cases for why additional resources are needed. If there’s a tool out there to help you to have faster time to insights then continue to build your case.
Pipeline concerns are keeping leaders awake at night
The main objective going into 2024 according to the report is the lack of pipeline. This mainly boils down to three big rocks:
Pipeline generation (number and/or value or new opportunities created in period&
Pipeline coverage (value of opportunities in pipeline / target value for period&
Pipeline progression (rate and speed of converting opportunities from one stage to the next within the period)
I find this diagnostic below useful to inspect the pipeline:
One key insight I found interesting was that 80% of respondents said they would inspect activity or account engagement either slightly more or much more. That’s an astounding rate. On one hand you want to trust your GTM teams that they are doing their jobs.
But hey it’s 2024 and winning is HARD. If you play any video games imagine going into your settings and selecting “DIFFICULT MODE”.
Without further adieu
Here are my 7 key areas of focus for the remainder of FY24
1. Increased Focus on Customer-Centricity and Personalization
Organizations will prioritize creating more personalized and relevant interactions throughout the customer journey, leveraging data and insights to tailor messaging, offers, and solutions to individual customer needs, preferences, and behaviors.
The last ten years I think we had a bit of a reductionist mindset. We conflated mail merge fields as personalization. But I think the new tools these Clay and ChatGPT (or variations such as SDRGPT) are game changers to truly unlocking the next generation of “personalization at scale”.
2. Omni-channel and Digital Engagement Expansion
There will be a stronger emphasis on creating a consistent and seamless customer experience across all touchpoints and platforms, utilizing multiple communication channels to significantly increase engagement and purchase rates.
There is a growing emphasis on de-anonymizing web traffic and pre-empting those signals via intent platforms.
I’m also seeing signals that CPC and CPMs for Paid Search (Google in particular) are starting to short squeeze its cost effectiveness. In my own business I have seen Paid Social’s effectiveness increase. BUT! Where I see a game changing modality is in short form video and the transformation of ‘influencer’ marketing moving its way from B2C over to B2B.
3. Agility and Adaptability in RevOps Strategy
The rapidly changing market and customer demands will necessitate flexible and iterative approaches in RevOps strategies, emphasizing a culture of experimentation and innovation. Ops team subconsciously tend to adopt Agile project management methodologies. Small, iterative changes make sense in a dynamic environment. That was true in an era of building.
BUT!
I see many companies starting to rationalize their stack. The bleed over from several tools makes it more likely finance would recognize and seize the opportunity for discretionary cuts. If teams have built up layers of technical debt in their stack, unwinding the stack requires a different sort of agility. The ability to safely transform and wind down parts of the stack may be par for the course in FY24.
4. Alignment Across Sales, Marketing, and Customer Success
RevOps will continue to drive the alignment of sales, marketing, and customer success teams around common goals to generate and grow revenue, supported by shared revenue goals, metrics, and technology stacks.
In FY23 Marketing took the brunt of the cutting. Sales teams that over hired did too. If teams cut into their CS organizations that’s tantamount to dropping the service/support experience of your customers. And yet we’re talking about focusing on Net Recurring Revenue as a metric. Go figure.
5. Strategic Focus on Data and Analytics
The establishment of data centers of excellence will be critical for addressing persistent data quality issues and leveraging data for strategic decision-making, requiring investments in technology and skills for managing, maintaining, and using data effectively. The legacy method of doing so is to unify all of the fragmented data sources into a warehouse and surfacing said insights to a visualization (Business Intelligence) tool. Tools like BoostUp can help in this regard. I also foresee the increased usage of AI+real time communication tools. I don’t know what this category would be called but imagine it’s a data concierge of sorts. You ask a question and the insights are served up to you right then and there with reasonable insights generated on the fly.
6. Surfacing “behind closed door” conversations tactfully
When I’m buying solutions the first place I used to go to was Google Search. Not anymore. Slack communities and private LinkedIn messages is where I’m getting most of my intel these days. I trust that the people I’m engaging are truthful with which tools they love and which tools they loathe.
So how do you get in front of that?
Companies obviously have to raise the bar of their products and services but I could see more companies bringing in practitioners (influencers??) to show them what they’ve got. These brands are going to have to get comfortable with the good, the bad, the ugly. I’d much rather prefer someone who has used the tool (even in a sandbox environment) that tells me BOTH positive and negative experiences with the tool.
Word of mouth and trust has never been more important. And I think marketing and sales teams are having a hard time of adapting to these new hidden information channels.
7. Adoption of AI will be slower than you think
AI solutions for automatically capturing seller interaction data from various communications sounds like it should be adopted to enhance insights into buyer behavior, improve buyer experience, and increase win rates.
BUT I'm finding in my conversations with Revenue Operators that it feels like “one more thing” to pick up. Who has time for that?
This is why I expect a handful of people to dive into AI (generative AI specifically) headfirst. The rest of folks will “wait and see”.
I'm a huge believer that generative AI will play a big role in Ops down the road. Specifically:
Agent led administration (using AI agents to administer tools)
Co-pilot for SQL queries (in fact I use it all the time to streamline my own queries)
If you’re slammed in your RevOps or want to level up; check out the RevOps Impact Offerings below
There are 4 ways I can help you:
1/ RevOps Course: Unleashing ROI (RevOps Impact). A ten-week RevOps course. Lessons from my career scaling from $10M to $100M+. Join 100+ alumni.
2/ Sales Ops Masterclass. A six-week virtual, live instruction SalesOps course designed to take your sales operations skills to the next level.
3/ You’re a GTM Startup. Sponsor this newsletter and reach 2,700+ tenacious revenue leaders. Reply to this email if you’re interested in receiving a media kit.
4/ 1-on-1 RevOps Coaching with me. Let me help you push through the ceiling