Consumption-Based Revenue Models: 4 Tips for Empowering Field Teams

As we continue to explore the shift from subscription to consumption-based revenue model, one aspect that requires particular attention is the adaptation of RevOps teams to this new operational paradigm. This transition to consumption-based models not only demands a change in mindset but also a reassessment of the roles played by sales, customer success, and RevOps teams. To delve deeper into this, we caught up with Ted Noble, SVP of Revenue Operations at New Relic, who shared his insights on managing this transition and the potential benefits it can bring to organizations.

Here are three actionable tips for RevOps leaders looking to navigate this model and ensure their field teams thrive.

#Tip 1: Implement a balanced incentive program for your field teams

A consumption-based model calls for a new approach from your sales team. Rather than just focusing on sealing deals and renewals, account executives must now drive usage. Echoing the 'yin and yang' philosophy, Ted suggests that sales teams should be incentivized to strike a balance between signing contracts and driving consumption. This cyclical sales approach can fuel further usage, thereby extending the platform's reach.

#Tip 2: Encourage synergy between sales, customer success, and customer adoption teams

As the role of salespeople evolves, it becomes crucial for them to collaborate effectively with customer success and customer adoption teams to stimulate usage. Technical account managers can support existing customers in maximizing their consumption, while sales teams can target new business units, users, and use cases. Aligning these teams' efforts will ensure a unified approach to delivering value to customers.

#Tip 3: Refine your RevOps strategy to support a consumption-based model

The transition to a consumption-based model will require significant changes in the way RevOps teams prioritize and measure success. As we mentioned in the previous post, conventional CRM tools, designed for managing subscription contracts with fixed end dates, may not be sufficient for tracking usage. RevOps leaders must invest in tools and processes that can monitor usage in real-time, enabling them to spot trends and respond promptly to changes in customer usage.

#Tip 4: Drive data-driven decision making

In a consumption-based model, it's crucial to base your decisions on real-time data and insights. For marketing, understand which strategies are gaining traction and which are not. For operations, use data to plan resources efficiently and identify areas of growth. For finance, leverage forecasting tools to present accurate numbers confidently. From a leadership perspective, use data to assess the overall health of the organization and the confidence level of meeting quarterly and annual commitments. This data-driven approach is integral to the adoption and success of consumption-based models. It promotes transparency, accountability, and aids in making strategic decisions.

Harnessing Aviso's AI-Powered Forecasting for Optimal Consumption-Based Billing

In a world where consumption-based model is becoming the norm, Aviso's consumption forecasting benefits are invaluable to RevOps leaders looking to stay ahead of the curve. Aviso is the first revenue intelligence platform to deploy real-time 'consumption-based' forecasting based on data in Snowflake, in addition to traditional 'opportunity-based' data in Salesforce, Microsoft Dynamics, SAP, Oracle, Hubspot, Veeva, and other CRMs. 

At Aviso, we use powerful AI and forecasting tools to conduct consumption forecasting with high accuracy for successful consumption-based models. Our cutting-edge AI-powered forecasting tools provide real-time insights into customer usage patterns, enabling your field teams to proactively identify growth opportunities and address potential churn risks. 

To learn more, read this post on Consumption Forecasting.

Conclusion

While the consumption-based model may not be a perfect fit for every company, it is worth considering for cloud-native businesses that want to align their pricing with customer value and costs. By following these three tips, RevOps leaders can ensure that their field teams are well-prepared to adapt to this new billing model and drive growth for their organizations. 

As Ted advised, it is crucial to research your customers and understand your product's value proposition before making the leap to a consumption-based model. With the right preparation, commitment, and collaboration, your company can unlock new growth opportunities and thrive in the consumption-driven business landscape.

Interested in building a successful business on a consumption-based model? Sign up for a product walk-through of Aviso AI.