One of the fastest-growing tech titles is Revenue Operations or RevOps.
What is it? Why is it booming? Is it essential for business? Should I invest?
There are several questions surrounding this trending topic. Hence, we decided to tell you about it.
Revenue Ops is a relatively new role in businesses. So, there is a lot of curiosity about what it is and how it works. If you too are as curious as a child, keep reading!
By the end of this blog, you will have the knowledge you need on RevOps.
What is Revenue Operations (RevOps)?
RevOps meaning Revenue Operations is a B2B function that aims at achieving an organization’s maximum revenue potential. The business function utilizes automation to enable teams to make better-informed decisions that facilitate business growth.
The Revenue Operations function brings together the marketing, sales, finance, customer service, or customer success teams. Together, these teams work towards achieving the following shared goals:
- To reduce revenue leakage
- To improve pricing for better conversions and margin
- To identify new revenue opportunities using customer data
In other words, RevOps aligns the marketing, sales, and customer success functions to drive revenue growth through operational efficiency. It helps in breaking silos among departments.
3 Reasons Why You Need Revenue Operations
The implementation of a RevOps framework breaks barriers among different departments. Here are three reasons why you should get a revenue operations strategy in place.
1. Improved collaboration among teams
Revenue Operations ensure better collaboration between marketing, sales, and customer success.
The different departments or teams within an organization require accurate data to make informed decisions.
In fact, 43% of marketing and salespeople say that the biggest challenge in aligning the marketing and sales departments is the ‘lack of accurate/shared data on prospects and target accounts’.
When working in collaboration, organizations perform better. It removes the friction and ensures the seamless functioning of a business.
RevOps facilitates data sharing. It ensures proper data synchronization in systems and allows cross-functional teams to work together to achieve a common organizational goal.
2. Better customer experience
While you may witness an increase in sales, if you overlook your customer experience, the revenue increase won’t last long.
It is significant to offer customers a positive experience if you want your customers to stick with you in the long run.
Moreover, a positive customer experience will also increase the overall revenue. According to Forbes, organizations that focus on enhancing customer experience witness an 80% gain in revenue.
A revenue operations strategy can simplify processes, increasing the operational efficiency of an organization. Thus, the GTM teams can focus more on customers and be more sensitive to their needs.
RevOps can create a seamless user experience by enabling the marketing, sales, and customer service teams to access accurate customer insights. These insights can then be used by the teams to address customer needs at every stage of their journey.
3. Increased transparency
Another reason why you must have a RevOps framework is to increase transparency among teams. It will ensure easy collaboration and information sharing.
Take, for example, a cross-team meeting scenario;
- the sales team discusses closed deals,
- the marketing team discusses SEO and other campaigns, and
- the customer success team talks about customer feedback.
Though all the teams have the same goal, they may not know what the others are working on. This can create friction, misunderstanding, and ultimately, strained relations.
RevOps addresses this friction. It ensures aligning the teams and providing clear visibility into what the other is doing. Also, RevOps makes data accessible to all the teams involved in the revenue cycle operations.
How RevOps Model Works?
Gartner predicts that 75% of the highest-growth companies worldwide will implement a RevOps model by 2025. Before that happens, let’s get some understanding of this model.
The RevOps approach is collaborative and customer-centric. There are three pillars around which the framework operates:
Revenue operations in SaaS activate different consistent processes as your sales team works towards converting the leads into customers. These processes foster accountability and trust among teams. Also, you get additional benefits like increased retention rates, shorter sales cycles, and increased upsell volumes.
Getting accurate information at the right time is the key to success. RevOps connects you to a tech platform that provides a clear and correct story around your sales pipeline. It is the single source of truth to identify how teams can, directly and indirectly, impact your revenue pipeline.
The final pillar of RevOps is the people responsible for managing processes and platforms. Revenue operations responsibilities are generally distributed among the RevOps team members.
Under the RevOps umbrella, all of these elements come together. It allows different departments to work as multiple parts of one unified organization towards common goals.
A RevOps framework can vary by business goals, operating plan, business model, and other factors. However, there are a few key attributes that make up the RevOps model.
- An end-to-end process design that supports the buyer’s lifecycle
- Seamless workflows interconnected across integrated data, systems, and functions
- A clear view of your revenue process implementation and outcomes
The RevOps framework starts from a revenue operations strategy and ends with an analysis of the implemented processes using key metrics. The framework has six significant components or stages.
A revenue operations strategy is a plan that aligns with an organization’s revenue goals. It structures and prepares the organization to maximize its revenue potential.
RevOps strategy includes:
- Stakeholder alignment,
- Revenue model,
- GTM strategy,
- Resource prioritization,
- Organizational design, etc.
It refers to the data required to manage and optimize the revenue cycle or the revenue processes.
This element involves,
- Data strategy and governance
- Data collection
- Shared data
This aspect of the RevOps framework includes automated and manual workflows essential to create a seamless and interconnected revenue process.
- Workflow design
- Joint processes
- Closed-loop processes
It includes the design, management, and tracking of the revenue processes. The activities involved here include;
- Customer lifecycle map
- Service level agreements
- Revenue process design and management
Technology refers to the tools and tech solutions, software crucial to implementing revenue operations function. The activities involved are;
- Designing the tech stack
- Developing core infrastructure (data, workflow, reporting & dashboards, etc.)
- Enablement and usage
The analysis phase involves tracking and measuring activities and performance across the revenue process. It involves;
- Forecast analysis
- Customer health analysis
- Pipeline analysis
- Funnel conversion analysis
RevOps vs. Sales Ops: 5 Key Differences
RevOps and Sales Ops are two ways that merge at a point. This point is their shared goal – both aim to drive an organization’s revenue.
But there are a few key differences between the two functions. Take a look.
- RevOps is all about the business processes and practices across revenue-generating teams. Whereas, Sales Ops is about sales reps-related activities. It is limited to the sales element of the total revenue strategy.
- RevOps covers the entire buyer’s journey, revenue funnels, customer experience, and go-to-market execution.
Whereas, Sales Ops focuses on territory planning, deal management, sales forecasting, CRM, salesforce, training, and development.
- Revenue operations teams focus on driving revenue via operational efficiency. It provides a complete view of the customers at all stages of their journey.
Whereas, Sales Ops teams focus on sales, onboarding, training, recruitment, contact management, team communications, etc.
- RevOps teams use analytics, AI, and other tools to discover opportunities and trends to drive revenue growth. Sales Ops use sales forecasting and data analysis to develop a sales strategy.
- The primary benefit of RevOps is identifying roadblocks in internal processes, prioritizing them based on impact, and eliminating them.
Whereas, the benefit of Sales Ops is driving strategic direction using data, reducing friction, implementing training and technology best practices, and assisting sales teams to close more deals efficiently.
How to Implement RevOps in my organization?
RevOps is already a rage. Organizations adopting the model are sure to thrive in the next three to five years. Here are a few key steps to implement RevOps in your organization.
Step 1: Audit
Find the areas of disconnect among departments through an audit. There are three main areas that you must audit to ensure an improved customer journey.
- Content – Audit the existing content, align it with the customer journey stage and fill in the gaps
- Technology – Audit tech used in sales, and marketing to ensure that they are working and producing results
- Website – Audit the website to ensure that you have the best practices of conversion in place and no entry barriers for buyers
Step 2: Define and align
Define the lifecycle stages for your team and align them using the three steps:
- Assess the analytics and ensure a complete view of the revenue pipeline and business health.
- Evaluate the tech stack and identify redundancies in tools, if any
- Provide fool-proof and streamlined RevOps processes to your team for inbound and outbound sales, content marketing, and customer satisfaction.
Step 3: Develop
This step involves the building of a few things like;
- GTM plan for customer satisfaction and acquisition
- Workflows to ensure moving leads through the system and correct data in the revenue engine
- Inbound and outbound sales follow-up emails, outreach emails, task queues
- RevOps dashboard showing the existing roadblocks
Building these aspects will ensure gaining forward momentum towards maximizing revenue potential.
Step 4: Implement and Optimize
Execute the framework and maintain consistency with your revenue operations strategy.
- Conduct RevOps meetings regularly to maintain alignment among departments, and discuss goals, the contribution of each department, and their role in achieving the goals.
- Structure and follow a 12-month plan to continue the adoption and optimization of the revenue growth strategy.
- Maintain a RevOps dashboard and keep it up-to-date. Use the dashboard monthly to identify the customer journey stage that has the most roadblocks. Work towards improving them.
What are the responsibilities of a Revenue Operations Manager?
A Revenue Operations Manager may have different roles in different organizations. For larger organizations, a RevOps Manager generally takes care of a RevOps analyst team.
The manager serves as a point of contact who coordinates, delegates duties, and delivers insights to the executives.
Here are the responsibilities of a revenue operations manager.
- Drive revenue – identify opportunities, create GTM strategies, and tactics to align customer lifecycle, finding out potential improvements in the sales process.
- Enable and lead the revenue operations team
- Supervise data administration and systems. Recommend tools to improve data analysis, quality, and reporting
- Coordinate cross-functional teams (sales, business operations, customer success, marketing, sales, etc.), work with them and other stakeholders to centralize info and share necessary insights
- Forecast revenue to provide teams with an understanding of the business’s health. Manage dashboards and help them meet goals.
- Collaborate with leadership roles to strategize, operationalize, and analyze the business initiatives’ impacts.
What are the Important Metrics in RevOps?
There are certain metrics that matter the most in RevOps. It is fundamental to measure these same value metrics to ensure building a successful revenue operations framework.
The primary focus of RevOps is to boost revenue. So, it is the obvious revenue operations metric that you must track.
But there’s a catch when measuring revenue – what exactly you must look for?
It depends on the industry and the period you measure.
For instance, considering revenue operations in SaaS companies, they usually measure the ARR or Annual Recurring Revenue to measure the revenue growth. Likewise, in telecommunications, the average revenue per user is measured.
The Net Revenue Retention (NRR) rate is a significant indicator of revenue and profit growth potential of a company. It helps you to understand your customers’ satisfaction with the business.
When measuring revenue retention, consider both net and Gross Revenue Retention (GRR) rates. Both metrics provide crucial insights into how the business is growing.
How to calculate revenue retention?
NRR = (Total Revenue + Revenue from expansion & downgrades – Churn)/ Total Revenue
GRR = (Total Revenue – Churn) / Total Revenue
The average GRR for SaaS companies is 90% which is a high benchmark compared to other industries.
Customer Churn Rate
This revenue operations metric measures the percentage of existing customers who no longer use a product/service within a specific time.
Customer churn rate critically depends on your customer retention strategies. The strong the strategy, the lower the churn rate.
As revenue operations enhance customer experience, the best you can do to retain customers is to implement a RevOps framework.
Cost of Customer Acquisition
The Customer Acquisition Cost or CAC is the amount a business spends to make a customer purchase a product or service. In other words, it is the dollars spent on acquiring new customers.
Calculate CAC using the following:
CAC = (Cost of sales + Cost of marketing)/ Number of New Customers Acquired
Tracking your CAC constantly is necessary if you want to measure revenue growth. Knowing the amount spent and earned from marketing strategies helps you to understand customer needs. Thus, you can create your strategies more efficiently.
Revenue Operations Alignment: Best Practices
It is crystal clear that RevOps starts with aligning different departments across the customer lifecycle. Here are a few best practices related to revenue operations alignment that you must know about.
Streamline metrics among departments
Each department within an organization has its own metrics. This often causes misalignment and creates different definitions for the same metric or measurement. The RevOps controls metrics from the start till the end of the customer cycle. It ensures that every department is on the same page and has the same understanding of core metrics and KPIs.
Trust and credibility in decision-making
As revenue operations clarify and improve the understanding of metrics, it helps different teams to make better-informed decisions. Analyzing the revenue cycle operations and tracking the metrics ensures data-driven and trustworthy decision-making.
Take ownership of the tech stack
Revenue Ops controls the tools and tech stack within an organization. It aligns the tech stack among departments like marketing, customer success, and sales. While ensuring alignment, RevOps collaborates with the IT teams to prioritize and maintain the data privacy and security needs.
When aligning different departments, RevOps brings certain changes in operations, communication, etc. Hence, it is necessary for the teams to maintain this alignment and prevent any friction from occurring.
Since adopting the RevOps model triggers change within an organization, departments must be ready to cope and manage the changes.
Top 4 Benefits of RevOps
The DmandGen Report revealed that RevOps adoption has grown as much as 55% in recent years.
But why the sudden rise of Revenue Ops?
The answer is easy – Benefits.
In fact, top B2B tech companies that relied on revenue ops derived significant benefits including 10-20% growth in sales productivity.
Here are a few RevOps benefits that can make you consider adopting the framework.
1. Data-driven decision making
Companies run on data. Often times you can get fixated on comparing different data points and trying to find the correlation.
Further, it may so happen where a few top-level KPIs look great but you do not the full picture. Therefore, you are unable to identify the metrics leading to revenue growth.
RevOps saves the time wasted in looking at various datasets and trying to piece them together. It provides a holistic view of the data and how it impacts revenue growth.
2. Visibility and accountability across teams
Marketing, sales, and customer success departments deal with different tasks but their goal is the same – to boost revenue and profits.
However, none of the teams realize the intertwinement of their activities. As a result, when monthly reports are out, one blames the other for not sharing info, not dealing with leads, etc.
This happens when the teams aren’t aligned. And as we have mentioned above, RevOps brings teams together. It breaks through the division by mapping and streamlining the hand-off points among the departments. Thus, it ensures visibility and accountability across teams.
3. Subjective forecasting for coherent and predictable pipeline growth
Forecasting becomes intuitive and not data-driven when you have to pull siloed information from different departments. This happens in companies without RevOps model.
You do not know what works and what doesn’t. And you cannot predict the revenue growth based on the direction of the wind.
Revenue operations is data-driven. It enables users to identify key data points that trigger a set of actions. Once you ensure that the right processes are being administered, you can predict the pipeline growth to see incremental improvements.
4. Faster sales cycle
When your teams work collaboratively toward a shared goal, hand-offs are clean, and you save a lot of time. The streamlined teams and processes, without friction, make the deal cycles much faster. As a result, you can witness a better customer experience and higher sale rates.
Optimizing customer experience is a priority for companies because it contributes to revenue growth.
The RevOps framework can ensure better effectiveness, efficiency, and growth in business. With the right revenue operations team and with the right tools, you can implement RevOps within your organization and achieve the goal of maximizing revenue potential.
One of the best tools that you should be a part of your RevOps tech stack is RevenueHero. This sales acceleration platform is the all-in-one solution to managing your incoming leads. Using the platform, you can easily route leads to the sales reps, qualify them, prioritize, and schedule meetings – all in real-time.
Explore the platform to know more!