RevOps KPIs and Metrics for SMBs - A Practical How-To Guide

Running a successful small or medium business (or starting up OR scaling up) requires a firm grip on key Revenue Operations (RevOps) metrics. RevOps aligns marketing, sales, and customer success to drive growth, so tracking the right Key Performance Indicators (KPIs) across the entire customer lifecycle is critical.

This article breaks down the most important KPIs for RevOps in early and growth-stage businesses, is industry-agnostic, with straightforward definitions, formulas, and practical tips for measurement and data governance. Founders, CEOs, and business leaders can use this as an action-oriented playbook rather than a theoretical paper.

To get started, the table below summarizes each key metric and how to calculate it.

Key RevOps Metrics and How to Calculate Them

In this article, we will review the top 7 metrics I recommend startups, scaleups and SMBs to start measuring immediately. If you would like to get a comprehensive guide, please download my free eBook - A Definitive Guide to RevOps for Startups and SMBs.

Now, let’s expand each metric, explaining what it means, why it matters, how to calculate and track it, and how to implement the necessary data practices to get reliable numbers.

1. Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) measures the average cost to acquire a new customer. It includes all marketing and sales expenses used to sign up new customers in a given period. In other words, CAC tells you how much investment is needed per new customer.

CAC is calculated as the total cost of customer acquisition (marketing spend, sales salaries, advertising, promotions, etc.) divided by the number of new customers acquired in that period.

For example, if you spent $50,000 on sales and marketing in Q1 and gained 100 new customers, your CAC = $50,000 ÷ 100 = $500 per customer.

How to measure

Typically, you measure CAC over a month or quarter. Gather all expenses related to acquiring customers – this may include campaign costs, marketing team payroll (pro-rated to time spent on acquisition), sales commissions, software for lead generation, etc. Then count how many new customers you signed in the same period.

By tracking this over time, you can see if CAC is rising or falling. Many startups calculate CAC alongside related metrics like Lifetime value (LTV) to ensure the economics make sense (e.g. aiming for an LTV/CAC ratio > 3).

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Tips to implement

1. Start by defining what costs to include in CAC.

2. Create a simple spreadsheet or use your accounting software to aggregate marketing and sales expenses for each period.

3. Ensure your CRM or customer database cleanly tracks new customer count.

4. Maintain data governance by categorizing expenses – e.g. tag invoices or salaries that are part of customer acquisition. This way, you can consistently pull the same types of costs. If resources are limited, even a monthly review meeting between finance and marketing can align on the cost figures.

5. Be careful to exclude customer success or retention costs – CAC should strictly be about new customer acquisition.

For example, at HookedGrowth, we use Xero to track our sales and marketing expenses. We then extract, transform, and pipe Xero data into our data warehouse to calculate CAC.

By keeping the formula consistent, SMBs can reliably monitor CAC trendlines and make informed decisions about marketing budget allocation or sales strategy if CAC gets too high.

2. Sales Cycle Length

Sales Cycle Length is the average time it takes to close a deal, from the first contact or opportunity creation to the deal being won.

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It’s usually measured in days or months. This metric tells you how long your sales process typically is. A shorter sales cycle means you get revenue faster and can recycle capital more quickly; a longer cycle might mean higher-touch sales or more complexity. It’s important for planning (e.g., if your sales cycle is 3 months, deals entering now might not close until next quarter).

How to measure

There isn’t a single formula but rather a process. For each closed-won deal, calculate the number of days from the date the lead/opportunity was opened (or first contact) to the date it was won.

Then take the average of those durations for all deals in a given period (e.g., deals closed in the last quarter).

For example, if three deals closed in a month and their individual cycle times were 10 days, 20 days, and 30 days, the average sales cycle = (10+20+30)/3 = 20 days.

You can calculate separate averages for different product lines or customer types if needed.

Tips to implement

Start by clearly defining the “start” of the sales cycle. If marketing passes leads to sales, is it when a lead becomes an SQL (Sales Qualified Lead)? Or when a meeting is first held? Consistency is key. Many use opportunity creation date as a proxy.

Next, audit your CRM data:

1. Ensure that you have a start date for each deal. This could be when the lead was qualified or when the opportunity was created (decide what stage counts as “start of sales cycle” – typically when sales begins active work).
2. Ensure that you record the close date when a deal is won.
3. For all deals that closed in a period (month/quarter/year), compute the difference between close date and start date, in days.
4. Compute the average (mean). Some also look at median if distribution has outliers.

It’s good to segment by sales cycle length for different categories. For instance, small deals might close faster (couple weeks) and large enterprise deals might take 6-9 months. As an SMB, if you sell to other SMBs, your sales cycle might be fairly short (weeks). If you’re a B2B startup selling to enterprise, expect longer cycles.

For SMBs with very short cycles (like self-service or transactional sales), you might instead track things like time to onboard rather than sales cycle. But generally, any B2B with a sales team should know their typical sales duration. When forecasting, this helps too – e.g., if a deal has been open longer than your usual cycle, it might be less likely to close (or it’s stuck). RevOps can flag such stalled deals.

Also, share this metric with marketing: if marketing generates leads, but sales cycle is 90 days, marketing should know that the fruits of their labor will show up as revenue only next quarter – aligning expectations. Overall, maintain a simple process: every time a deal closes, log how long it took. Over time, you’ll build a baseline that you can try to improve and also use for more accurate forecasting and pipeline management.

3. Win Rate

Win Rate (also called Close Rate) is the percentage of sales opportunities that you win (close as a sale) out of the total opportunities pursued. It’s a direct measure of sales effectiveness – how good you (and/or your team) is at converting leads into customers. A higher win rate means for every X deals in your pipeline, you close more of them. This metric can be calculated overall or per sales rep, per product, etc. Tracking win rate helps diagnose issues: a low win rate might indicate poor lead quality, strong competition, pricing issues, or sales skill gaps. Improving win rate is often a high-impact lever for increasing revenue without needing more leads.

How to measure

Win Rate = (Number of deals won ÷ Number of deals that had an outcome) × 100%. Typically, you calculate it as Won / (Won + Lost), ignoring deals still open.

Win Rate = (Number of deals won ÷ Number of deals that had an outcome) × 100%. Typically, you calculate it as Won / (Won + Lost), ignoring deals still open.

For example, if in Q1 your team won 20 deals and lost 30 deals (lost meaning they went to a competitor or the customer decided not to buy), your win rate = 20/(20+30) = 40%.

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Sometimes people calculate as won out of all opportunities including those still in progress, but that would understate since open deals might still close. So it’s best to consider a set of closed opportunities. You might compute this monthly or quarterly. Win rate can also be measured in terms of revenue (value of won deals vs value of all closed deals), but count-based is common and straightforward.

Tips to implement

1. In your CRM or sales tracking sheet, make sure each opportunity has a stage and a final outcome field (Won, Lost, or maybe Closed-No Decision). When an opportunity is marked Closed-Lost, it counts as not won. Over a given timeframe, gather all opportunities that were closed (either won or lost). Then simply divide how many were won by the total of those.

2. To future proof this, first ensure consistent opportunity tracking. Every lead that gets serious (beyond just an inquiry) should become an opportunity in your system and eventually be marked won or lost.

3. Data hygiene: enforce that no opportunity should be left hanging without an outcome beyond a reasonable time. If it goes cold, mark it lost (you can use a Lost reason like “No decision” if needed).

4. For governance, define what “Lost” means – e.g., if the prospect said “not now, maybe later,” do you close it as lost (with reason “postponed”) and open a new one later? Usually yes, you’d close it and later treat as new if re-engaged. This ensures win rate isn’t artificially high by excluding indefinite maybes. SMBs can calculate this manually each month/quarter initially.

5. As you grow, your CRM can report win rates. Use win rate in tandem with other metrics: e.g., win rate and average deal size tell you how many deals you need to hit a target. If you need $100k and your average deal is $10k, that’s 10 deals. If win rate is 50%, you need 20 opportunities to get 10 wins, etc. This is fundamental for sales planning.

4. Pipeline Velocity

Pipeline Velocity (also known as Sales Velocity or Sales Pipeline Velocity) measures how quickly deals are moving through your sales pipeline and generating revenue. It’s like the speedometer of your sales engine – combining several factors (number of opportunities, average deal size, win rate, and sales cycle length) into one metric that tells you how much revenue you’re producing per unit time. A higher pipeline velocity means you are closing more revenue faster. RevOps teams monitor this to identify bottlenecks; for example, if velocity is low, perhaps the sales cycle is too long or win rate is low.

How to measure

A common formula for sales pipeline velocity is multiplying the number of opportunities, average deal size, and win rate, and dividing by sales cycle length.

This formula yields a value in “revenue per time period”.

For example:

1. Number of qualified opportunities in pipeline: 50
2. Average deal size: $5,000
3. Win rate: 20% (0.20)
4. Sales cycle length: 60 days

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Plugging in: (50 * $5,000 * 0.20) / 60 = $50,000 / 60 ≈ $833 of revenue per day as the pipeline velocity. If you multiply by 30, that’s about $25k per month on average.

This means given those inputs, you’re generating $25k per month from your pipeline on average. Another way: sometimes people multiply by a period, e.g. use sales cycle in months, then velocity is per month.

The four ingredients you need to collect:

1. Number of Opportunities: decide what stage counts as a “qualified opportunity” (e.g., those in proposal stage or later, or those that meet some qualification criteria). It could be new pipeline created in a period or all open pipeline; be consistent.
2. Average Deal Size: calculate this from historical data (total value of deals won ÷ number of deals won, over a period).
3. Win Rate: typically win rate = deals won ÷ (deals won + deals lost) in a period. You might use an overall win rate, or specific to certain pipeline.
4. Sales Cycle Length: the average time from opportunity creation to close (for won deals). E.g., if on average it takes 60 days to win a deal.

Tips to implement

1. In an SMB, pipeline velocity is great to track once you have a bit of sales data. To implement, first ensure you have a defined sales pipeline in your CRM with stages and that you’re logging dates for stage changes or at least creation and close dates.
2. Clean up your opportunity data – make sure won/lost are properly marked and have values and dates.
3. Calculate your average sales cycle (you can do this by exporting deal data and computing the difference between created date and close date for each won deal, then averaging).
4. Calculate win rate similarly from closed deals. Average deal size is straightforward from closed-won revenue.
5. Once you have these, share the baseline velocity with your team (e.g., “We currently generate about $X per month from our pipeline given current conversion rates.”).

This can spark discussions: How can we increase pipeline velocity? Perhaps by shortening the sales cycle (maybe streamline contract process or offer incentives to buy by end of month), or by improving win rate (better qualification or sales training), or adding more opportunities (marketing efforts), or raising deal size (value-based pricing).

The key is that increasing any of the numerator factors or decreasing the denominator will increase velocity:

• More opportunities -> more potential deals closing.
• Larger deal size -> more revenue per deal.
• Higher win rate -> more of those opportunities convert.
• Shorter cycle -> deals close faster (more cycles of selling can happen per quarter).

For example, at HookedGrowth, we use PandaDoc to cut our contract process time in half, utilizing PandaDoc’s robust document management, automation, CRM sync, and sales room feature, and hence reducing our overall sales cycle length. Learn more about how PandaDoc can help you shorten your sales cycle length.

5. Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR)

Monthly Recurring Revenue (MRR) is the predictable revenue that a business can expect every month from subscription customers. It normalizes subscription payments into a monthly amount. Annual Recurring Revenue (ARR) is simply the yearly equivalent (often ARR = MRR × 12) for businesses that prefer annual metrics. These metrics are vital for any recurring revenue business (common in SaaS) to gauge growth and forecast future revenue.

MRR is calculated by summing all the recurring subscription revenue for the month. For example, if you have 10 customers paying $200/month and 5 customers paying $100/month, your MRR = (10×$200) + (5×$100) = $2,500.

One-time charges or usage-based fees are excluded; only recurring fees count. If customers pay quarterly or annually upfront, convert those to a monthly figure (e.g. a $1200 annual subscription contributes $100 to MRR each month). ARR is simply MRR × 12. If your MRR in December is $50k, your ARR run-rate is $600k. (Note: Some companies calculate ARR by summing all active annual contracts’ values – the result should be similar).

How to measure

To measure MRR, you need a reliable list of all active subscriptions and their billing amounts.

Most SMBs use a billing system or a spreadsheet to track customers and what they pay.

Ensure you update this whenever you add or lose a customer or they change plans. MRR should be measured at the same day each month (e.g., on the 1st or last day) to stay consistent. Track components of MRR changes too – e.g. new MRR from new customers, expansion MRR from upsells, churned MRR from cancellations. These give insight into what’s driving growth. MRR and ARR are powerful for forecasting: if you know your MRR today and your average growth rate, you can project where you’ll be next quarter or year.

Tips to implement

1. Implementing MRR/ARR tracking requires solid data on your customers’ subscriptions. Early-stage companies can start simple: maintain a list (spreadsheet or CRM) of every paying customer, their plan, start date, amount, and billing cycle.

2. Sum this up for current active customers to get MRR. Automate where possible – for example, use invoicing or subscription management tools (Stripe, Chargebee, etc.) which often report MRR/ARR directly. Data governance is key: define what counts as “recurring.” Ensure everyone uses the same definition (e.g., exclude setup fees or one-time services).

3. Reconcile your MRR data with your accounting records monthly to catch discrepancies. As you grow, consider a dedicated analytics tool or RevOps platform to calculate MRR/ARR and track changes (new, expansion, churn) automatically. If you are a founder, one immediate action you can take is to review your current customer list and calculate your MRR today – this number is your baseline for growth planning.

6. Renewals (Renewal Rate)

Renewals measure how many customers continue their subscription or contract at the end of each term. It’s essentially the inverse of churn. A Renewal Rate tells you the percentage of customers (or revenue) that renewed their contracts instead of canceling. High renewal rates mean you’re retaining customers, which is crucial for subscription businesses and long-term revenue stability.

We can refer to this as logo (customer) renewal rate or revenue renewal rate (sometimes called gross retention). Here we focus on customer renewal rate unless otherwise noted. Customer Renewal Rate = (Number of customers who renewed ÷ Number of customers up for renewal) × 100.

For example, if 50 customers had subscriptions expiring this quarter and 40 of them renewed (10 did not), your renewal rate = 40/50 = 80%. You can also compute a Revenue Renewal Rate similarly by using the dollar value of contracts renewed vs. up for renewal. Both are useful: customer renewal rate tells you about logo churn, while revenue renewal captures the mix of contract sizes (important if some customers are larger than others).

How to measure

First, identify which customers are “up for renewal” in a given period. For a monthly subscription, essentially all active subscribers are up for renewal each month (unless they are mid-contract on annual plans). For annual contracts, you’ll have specific renewal dates. Track how many of those due for renewal actually renewed (extended) versus how many churned.

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This requires a good handle on contract dates or subscription statuses. Many companies measure renewal rates monthly or annually. Example: If you had 100 subscribers at start of month and 5 canceled (95 stayed), that’s a 95% monthly renewal. It may be easier to measure churn and then do 100% – churn% = renewal%. In this example, churn was 5%, so renewal is 95%. Gross Renewal Rate typically excludes any upsells; it’s purely the retained portion.

Tips to implement

1. To track renewals effectively, centralize your customer contract data. Even a basic spreadsheet can list each customer, their start date, renewal date, and renewal status.
2. Set up alerts or a calendar for upcoming renewals. SMBs should implement a simple process for renewals: e.g. customer success or account managers reach out 1-2 months before renewal.
3. From a data governance perspective, clearly define what counts as a “renewal” (a customer continuing at equal or higher terms) and what counts as a “churn” or “cancellation”.
4. After each renewal period, log the outcome for each customer (Renewed, Canceled, Upgraded, etc.). This historical data will let you calculate renewal rates easily.
5. Automation tip: If using a CRM like HubSpot or Salesforce, use fields for contract end dates and build a report of due renewals and outcomes. By keeping this data clean and updated, you can regularly compute renewal rates and quickly spot if they are trending down (a warning sign to investigate product or support issues).

7. Upsells/Cross-Sell (Expansion Revenue)

Upsells and cross-sells capture additional revenue from existing customers. An upsell usually means upgrading a customer to a higher-priced plan or higher usage, while a cross-sell means selling an additional product or service to a customer. Both result in Expansion Revenue – revenue growth from your current customer base. This is key for RevOps because it’s often cheaper to grow an existing customer than acquire a new one. A strong upsell/cross-sell motion leads to higher Net Revenue Retention (NRR) and indicates that customers find more value over time.

How to measure

There are a few ways to quantify upsells/cross-sells:

1. Expansion MRR/ARR: The total new recurring revenue added in a period from existing customers upgrading or buying more.
2. Upsell Rate (logo basis): (Number of customers in a cohort who purchased an upsell ÷ total customers in the cohort) × 100. For example, if out of 100 customers this quarter, 15 customers expanded their accounts, the logo upsell rate = 15%.
3. Upsell Rate (revenue basis): (Value of expansion revenue ÷ total revenue of cohort) × 100. For instance, in a cohort of $100k ARR that grew by $10k via upsells, the upsell rate (revenue) = 10%
4. You might also simply track absolute Expansion Revenue (e.g. “we added $50k in upsell ARR this quarter”).

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All these metrics tell a story of how much more value you’re squeezing out of the existing customer base.

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For simplicity, many SMBs start with just the amount of upsell revenue each month or quarter, and perhaps an upsell percentage of starting revenue.

Tips to implement

1. Start by integrating upsell tracking into your sales or customer success workflow. Whenever a customer upgrades or buys more, ensure it’s recorded (in the CRM, billing system, or even a Google Sheet). In HubSpot, you can categorize each new deal as “New Business” or “Existing Business” by default. Mark the date and the revenue change.
2. For data governance, define what qualifies as an upsell vs a new sale (if an existing customer buys a completely separate product line, decide if that is cross-sell to include in expansion metrics or counted as a “new” sale in sales metrics). Many subscription management tools will automatically categorize revenue movements (new, expansion, contraction, churn). If you don’t have that, consider a manual log: each quarter, list which customers expanded and by how much.
3. Calculate an Upsell Rate to complement your renewal rate – e.g. “of customers who renewed, 20% bought additional licenses.” This can help in forecasting – cohorts with higher upsell rates are likely healthier.
4. Keep your customer list with current and previous spend, so you can compare and ensure accuracy. By actively measuring upsells, SMBs can identify opportunities (e.g. if upsell rate is low, maybe invest in expansion training for your team or tweak your pricing tiers to encourage upgrades).

Looking ahead

This article provided a foundational understanding of crucial RevOps KPIs for SMBs, including Customer Acquisition Cost (CAC), Sales Cycle Length, Win Rate, Pipeline Velocity, Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR), Renewals, and Upsells.

By consistently tracking and analyzing these metrics, you can optimize your revenue operations, drive growth, and make informed decisions.

If you want to dive deeper and master the full spectrum of RevOps, download our comprehensive ebook, “The Ultimate RevOps Playbook for Startups & SMBs,” covering all essential KPIs, team alignment strategies, tool integrations, and a look into the future of agentic AI in RevOps workflows.

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