Tracking and reporting additional revenues post-merger in HubSpot
When a company takes over another existing business, several systems must be merged. Apart from compatibility issues, one of the most important tracking points is the additional revenue generated from deals after the merger. And if the earlier company had its own ways of tracking revenue, that needs to be brought into HubSpot so that the additional revenue realized is recorded.
Growth in revenue also needs to be tracked separately, to evaluate the additional revenue being generated. In this particular case discussed on HubSpot, the merged company was migrating on-premise systems to the cloud. That needed to be integrated into HubSpot’s monitoring and reporting.
Frederick Lindum wrote: In our company, we do a lot of M&As (Mergers and acquisitions). Here the strategy is to move customers from their legacy system, which we've acquired through the M&A, to our system. We move customers from on-prem to the cloud.
Let's illustrate with an example:
Customer A pays $ 1000 per month today for their legacy on-prem system
Customer A decides to order our new cloud system and the new MRR is $ 1 500
The amount on the Deal in HubSpot (the MRR) says $ 1500, but that doesn't mean that we as a company have secured $ 1500 in new revenue. Instead, we've secured $ 500 in new revenue and it's only the $ 500 that is relevant. So how do we measure this?
Making a distinction between existing revenue and added revenue
On the Company and Deal object, we've created fields for Current MRR (text field). This means that when we close a Deal we insert the customer's current MRR on that Deal so that we can do a report in Excel and manually calculate the AMRR by subtracting the current MRR from the amount (MRR) on the won Deal in HubSpot.
What challenges does that raise?
Bringing the systems of two different companies together is a complex task. While there could be synergies, merging revenue streams gives early insights
First, you are not able to see the added revenue sold in HubSpot. When looking at all closed Deals for a month it could be $ 20,000, but this says nothing about AMRR. With won Deals, we are, as explained above, able to do this manually, but it is not only with won Deals that we wish to look at AMRR, we also want to forecast AMRR. So how do we do that?
The goals inserted into HubSpot are also AMRR. Therefore, we are not able to see if we are on or off target, due to the fact that the goal is AMRR, and won Deals are shown as regular MRR.
How I think (hope) we can solve it
My assumption is that it should be possible to set up HubSpot to automatically subtract the amount inserted into the Current MRR field on the Deal with the amount (MRR) on the Deal and then set all reports (won Deals, A vs. B, Forecast, lost Deals, etc.) to use that number instead.
Using Calculated Properties to track the difference
Mike Eastwood suggested the following and it was marked as an accepted solution: What if you used Calculated Properties (available on Enterprise) and then used a workflow to update your deal amounts?
Calculation properties in HubSpot allow you to automatically calculate the min, max, count, sum, or average value for properties on associated records or set up custom equations based on other properties.
They can be set up based on different criteria, including property values of associated records, the time between two properties' values, or your own custom equations.
Frederick Lindum had a couple of other concerns: We start forecasting from the very first stage in HubSpot. This often means that the Items change during the lifetime of the Deal, meaning that the Revenue Increase would also change accordingly to the change in Items. With this solution, we would need to manually calculate the change in Revenue Increase each time we change an Item. This is not scalable for our department because each sales rep at any given time works with 25 - 50 Deals.
Deals are the culmination of efforts made right across the company. In a sense it is like passing the baton along in a relay race. And that’s how workflows establish the route to revenue
If we do this anyway, would we then be able to create a forecast using the native fields for Probability, and Close date, and then create a new Forecast Amount field, would that automatically calculate the weighed amount based on Revenue Increase, Forecast Probability, and Close Date?
As a solution for Closed Won Deals (maybe also Closed Lost Deals) this is definitely something that could work - didn't think about that, but I don't see it as a great solution for Forecasting due to many manual calculations during the lifespan of the Deal.
How Blueoshan can help integrate different systems into HubSpot
Including the example above, there can be several challenges that come to the fore when changes are implemented in a company’s systems. Blueoshan can evaluate and let you know how each one of them can be tackled and implement the changes as well.
As a Diamond Partner having worked with clients across several sectors, we have acquired expertise in implementing HubSpot in ways that work with the client’s existing systems and tackle specific challenges.
Using workflows, and datasets that could run into millions of records as well as building reporting and tracking systems, Blueoshan helps clients maximize their investment in HubSpot. And the ability to drill deep into revenue generation or deal visibility for tracking progress.
Talk to us about your specific requirements and we’ll be glad to come up with solutions that work.
Get in touch with us anytime here
Blueoshan is a HubSpot Diamond -Tier Solutions Partner. Delivering worldwide from India