When you’re striving for aggressive growth in marketing, using OKRs to set goals and track results is a must. OKRs help you define what to focus on, and what does matter to your business. But identifying such targets and goals, is no easy task.
Objectives and key results (OKRs) are a critical piece of information that should be approved at the highest levels of the organizations and discussed with / presented to the marketing team. OKRs are in most cases the product of an internal discussion among the team leads, and they’re usually based on two elements:
- Historical performance
- Revenue goals for the year
In some cases, you might not have much choice on the latter, as revenue targets could be dropped on your head like a hammer by investors, board of directors, etc…
Hopefully, you have a say in how those numbers are being generated; certainly, you can help shape that decision by providing valuable insights on what is achievable given a specific set of resources.
Here the most common OKRs for a subscription-based business:
Top of the funnel
- How many individual users are landing on your website?
- How many are converting into leads?
- Converted leads
- How many of these leads are actually interested in your product/services?
Bottom of the funnel
- Open vs. contacted leads
- This is a key indicator of sales effort. Are the sales reps contacting the leads? Though it’s a sales metric, marketing should be monitoring the lead treatment process and help optimize it.
- New business opportunities
- How many qualified leads are in the pipeline?
- New accounts
- This one is pretty straight forward.
- Monthly recurring revenue (or monthly run rate). Clear indicator or month over month growth, expressed in $. It is the monthly revenue generated by newly added accounts in any given month.
- Annual contract value, or simply contract value if your business doesn’t bill annually, it is an indicator of deal size. You want to make sure this number, expressed in $, grows YoY or at least stays flat. A decrease in ACV might indicate extreme discounts being applied at checkout in order to gain new accounts.
- Annual run rate is what most investors will look at to evaluate the potential future value of your company, as long as ARR is accompanied by a healthy account growth. The ARR is nothing more than a 12 month revenue projection based on the total monthly revenue of today.
This list is a pretty decent fit for most small-medium sized subscription-based businesses, but it might always require some tweaking and customizations to make it work for your unique needs. Also, since the best way to make money is not to lose money, also remember that things like churn, customer engagement and cross-selling/up-selling revenues, are critical to every healthy business.
Did we miss something? Of course we did, so please add comments below. But please, as always, be kind 🙂