- What is Revenue Operations?
- Why Are Companies Adopting a Revenue Operations Model?
- What's the Value of Revenue Operations for a Company?
- What to Think About When Setting Up a Revenue Operations Team
- Implementing Revenue Operations Capabilities
Revenue operations (RevOps) is a fast-developing part of the go-to-market strategies of many businesses. It aims to optimize the end-to-end customer engagement process in a company. Revenue operations typically captures sales operations, marketing operations, finance operations, and the systems and data that support and enable these processes.
A revenue operations team aims to integrate and consolidate these processes. Sales, marketing, and finance have a significant impact on the customer journey and experience, especially where subscription pricing models feature in B2B and B2C offerings. Seamlessly integrating these processes drives operational efficiencies, so that leads, opportunities, transactions, and renewals are managed frictionlessly using the same data and systems. It also ensures that a customer's lifecycle is optimized for the customer themselves while helping the business maximize the value of each relationship.
This integrated approach to managing revenue operations also enables companies to see the end-to-end process in near real-time. They can see how long it takes for customers to go through the sales process and understand where there are bumps in the road so they can proactively reconfigure products and offerings to iron them out.
While many companies are experienced in managing sales operations, leveling up to implement integrated revenue operations can be a challenge.
Let's explore how best to structure, support, and enable your revenue operations team.
Before we jump into how to build your revenue operations team, let's explore revenue operations in more depth.
Revenue operations activities cover any aspects of a company's operations that can impact its cash flow. Revenue operations typically leverage cloud computing and big data capabilities that allow organizations to combine business processes that historically have been placed in different silos, making them challenging to effectively integrate.
An effective revenue operations team acts as a center of excellence for a company when engaging with its customers. While typically focused on sales, marketing, and finance operations, it might extend to customer success teams or product development, depending on the sophistication of a product or service.
Again, depending on the business’ structure, a revenue operations team might fall within the sales function, the marketing function, or it may be a team in its own right, led by a VP of Revenue Generation and reporting to the CEO.
Why Are Companies Adopting a Revenue Operations Model?
Revenue operations initiatives are a response to the relentless pace and scale of innovation in the technology, communications, products, and services marketplaces. Companies need to navigate changes and disruptions differently if they are to thrive and survive.
There’s a significant premium in attracting prospects to your website and your business and being able to convert them in the shortest time into customers. Understanding this process and constantly streamlining it requires time, data, and insight.
What's the Value of Revenue Operations for a Company?
Transitioning to a revenue operations model offers several advantages for the business.
For Sales Teams
For sales teams, revenue operations are designed to give them high-quality leads and opportunities from customers who have been effectively targeted, cultivated, and hopefully well-primed to buy. This should reduce the sales cycle, increase average deal sizes, and lead to deep customer relationships as the insights gleaned from an effective revenue operations program drive engagement with the right audience at the right time.
For Marketing Teams
For marketing teams, the value of an integrated revenue operation is that it provides a platform that assures leads are properly followed up and ensures that much of the customer lifecycle management can be automated. It also offers the ability to consolidate data from the marketing pipeline, the sales pipeline, and finance systems to generate fresh insights into how a company's customers are engaging with it, through which channels, and how this may be changing. Integrated revenue operations help marketers anticipate changes throughout the go-to-market process. This allows them to maximize their profits and margins, whether it be through price changes, product enhancements, or changes in the terms and conditions, for example.
For the Customer
While there’s significant value for a business in taking an integrated approach to managing its revenues, there’s value for the customer too.
Executives, managers, and marketers have been preaching the value of customer-focused business practices for years. In fairness, and to an extent, companies have achieved this, but joining siloed business processes into a unified whole – in the customer's eyes – is the next challenge for many businesses.
An integrated approach means that companies have exceptional visibility of their customers' needs, issues, and buying processes. It also means that they’re exceptionally well-served in catering to these needs quickly, efficiently, and on time.
What to Think About When Setting Up a Revenue Operations Team
How you approach setting up your team will depend on your objectives and what you’re looking to achieve.
While it will vary by company, four bases will need to be covered:
Operations management works across the business to ensure it meets its objectives, typically by running initiatives that generate leads or revenue. Operations management involves leading these initiatives, as well as following the direction of product owners, customer relationship managers, and the sales and marketing functions.
Sales enablement ensures that salespeople have the suitable material and training to be fully effective. This’ll encompass industry insights, customer pain points, objection handling, as well as how their product or service can address them. It will also include the content they need to be effective, whether brochures, slide decks, email templates, or anything else a salesperson might need to be successful.
The smart move is to use customer insights from your revenue operations process analytics to shape and inform your sales enablement content.
Sales and Marketing Insights
An insights team can offer fresh ideas and new insights to everyone from a marketing program manager to your Board. From day-to-day insights to strategic analysis, this team will give you confidence in the decisions you're making, as well as the quality of data to back them up.
As you already probably realized, this approach is quite different from approaches you’ve used in the past. Indeed, it’ll likely use more systems and data than you ever have previously. However, technology innovations around cloud computing and big data mean that technology is your friend. A capable technology team in place can give you everything you need to be effective to deliver your revenue operations strategy.
Implementing Revenue Operations Capabilities
Having the right people in your revenue operations team, perhaps led by a Chief Revenue Officer, is just the beginning. Revenue growth will depend on having the right systems and business processes to deliver the customer journey you’re looking to put in place.
The great news is that you are almost certainly well down the road in delivering this already. You’ll already have large volumes of customer data to hand that a sales ops team will have captured in your CRM environment. Their peers in the marketing function will already be using marketing automation toolsets that help them understand where leads are coming from and how customers utilize a range of different sales channels to engage with you. You’ll have financial systems that highlight the spend information of your customers and the nature of the contracts they have with you. You might even have access to their credit history and credit rating, which can help you plan new initiatives. It’s almost certain that many essential tools are already in place to give you an excellent view of a standard customer lifetime value.
A revenue operations team's key requirement is to have a revenue intelligence capability in place. This allows you to consolidate – at the click of a mouse – all the data used by your various sales operations, marketing operations, and finance operations teams. Revenue intelligence capabilities allow you to understand the end-to-end sales and marketing process, covering lead generation, opportunity conversions, closing rates, as well as renewals. They give you a near real-time perspective on your sales conversion, and you can see where there are bottlenecks in the sales process that are slowing your sales and your cash flow.
The volume of data you could potentially have access to is vast and will likely multiply as you acquire additional data sets. The practical option is to use no-code predictive analysis tools that allow you to identify emerging themes and insights that you can develop further in your own time or by using machine learning software.
These same insights can help you create sales compensation and incentive management plans that can seamlessly integrate into your revenue operations strategy.
Learn how to drive growth through operational efficiency using revenue operations (RevOps) with The Revops Framework eBook.