Revenue Engine Analytics - Part I

This is a series I’ve been looking forward to since I launched Mastering Revenue Operations.

We are going to study the science of revenue engine analysis.

What does good performance look like? How is it defined?

How you measure something determines your understanding of it. When it comes to engines I care about three things:

1. Power - can it generate satisfying thrust?

2. Efficiency - does it operate intelligently?

3. Reliability - can I count on it?

It's worth noting that striking the right balance among these factors can be tricky. A powerful engine might sacrifice some efficiency, while a highly efficient engine might not offer the same thrilling performance. The best engine for you depends on your needs, priorities and resources.

This applies to all engines and especially to revenue engines.

Let's adapt these engine performance factors to the context of a B2B revenue engine at a high-level and then we’ll study frameworks and specific diagnostic questions.

In Parts II and III we will be demonstrating some of these calculations and talking about ways to measure them in your own revenue engine.

The Key to Power (Revenue Generation)

• Can it generate satisfying thrust?

  • Does the revenue engine consistently deliver strong revenue growth?

  • Is it capable of achieving ambitious sales targets?

  • Does it have the capacity to scale and handle increasing demand?

• Key metrics:

  • Year-over-year revenue growth

  • Pipeline generation rates

  • Sales pipeline velocity

  • Average deal size

  • Customer acquisition cost

The Key to Efficiency (Intelligent Resource Allocation)

• Does it operate intelligently?

  • Is the revenue engine optimized to maximize output with minimal waste?

  • Are resources allocated effectively across marketing, sales, and customer success?

  • Are processes streamlined and automated to eliminate inefficiencies?

• Key metrics:

  • Marketing ROI

  • Sales KPI productivity

  • Customer lifetime value

  • Churn rate

The Key to Reliability (Predictable Performance)

• Can I count on it?

  • Does the revenue engine deliver consistent and predictable results?

  • Can the business rely on it to sustain growth even in challenging market conditions?

  • Is it adaptable and capable of evolving to meet changing customer needs and market trends?

• Key metrics:

  • Sales forecast accuracy

  • Customer retention rate

  • Recurring revenue percentage

  • Net Promoter Score (NPS)

Another way to think of this is “count and conversion” as you travel down the funnel. Do you have enough count / mass at each stage? Are they converting at an acceptable rate?

All good revenue engines have a robust system for identifying and qualifying high-potential leads. Leaders of these orgs provide the sales team with the tools and resources they need to close deals effectively.

While we celebrate new business wins the game is often lost in retention. Thankfully we can upsell and cross-sell to recover recurring revenue. The engine should prioritize customer satisfaction, retention and promotion to drive long-term revenue growth.

Just like with a physical engine, finding the right balance between power, efficiency, and reliability is crucial for a successful B2B revenue engine. By focusing on these key factors, businesses can build a high-performing revenue engine that fuels sustainable growth.

Now lets look at specific frameworks for revenue engine analysis being used across the industry today.

Revenue Engine Analysis Frameworks