Nowadays, Revenue Operations (RevOps) is quickly turning into a hot topic among large and small companies alike. This is because the RevOps function is emerging and is starting to play a major role in determining whether or not a business succeeds.
Just like in baseball teams, RevOps today requires strategy, planning, execution, and teamwork. Thus, it is expected from a RevOps Manager to make strategic decisions by taking full-funnel accountability to drive revenue growth throughout an entire company; just as a coach must select which player will play first base, and whether the pitcher will throw strikes or smash breaking balls.
So, how much value does Revenue Operations add? And where does it fit into the overall strategy of the company? Learn all there is to know about this popular discipline below.
What is RevOps and why is it relevant in today’s modern business landscape?
Revenue Operations, also known as RevOps, is a business function that has materialized over the past few years. It focuses on maximizing the revenue potential of a company by aligning Sales, Marketing, and Customer Success in terms of processes, tools, and people.
When properly implemented, RevOps not only helps turn new leads into clients, but it also supports customer retention and encourages upsell opportunities. It manages every aspect of the relationship between customers, prospects, and employees to optimize internal operations, improve client acquisition, empower customer delight, and establish a company culture that strives to reach revenue goals.
Revops is a holistic approach that works to operationalize revenue so that business leaders can stop going blind when trying to predict future growth and performance.
Some of the reasons why this role has emerged over recent years include:
- Traditional organizational processes became obsolete as complex technology emerged. The disconnected and outdated data that was previously used caused inaccuracies for executive teams.
- Customer expectations have shifted, as consumers are now more informed than ever before, which has added pressure to establish a single cross-functional process for all departments to align on and follow.
- The appearance of cloud business models forced Sales, Marketing, and Customer Success to work together as one revenue team with a single common purpose. The developments in AI and automation opened up a new range of possibilities, providing organizations with actionable insights to drive real change for the company.
- The need for transparency and accountability within organizations. Communication has become a key element when creating a good company culture. Revops helps to build bridges between different departments and align all employees on shared objectives.
- The need to consolidate the acquisition, implementation, and management of business tools under one team to save costs. Revops teams review each solution used by the organization to ensure that the company’s tech stack is both practical yet efficient.
- The necessity to adapt to market changes and economic shifts. By measuring business performance from a holistic point of view, businesses have a better idea of what is working and what needs to be adjusted as the environment evolves.
The 3 big P's of RevOps
There are three main RevOps pillars that determine the success of an organization: Processes, Platforms, and People.
To achieve these three big P's, it is important to have an effective strategy and plan in place. In other words, you should know where you want to go and how you will get there.
If you do have a clear vision of what you want to accomplish, then you can focus all your efforts on making sure you stay on track and are heading in the right direction.
One of the main functions of Revenue Operations is to make sure the right processes are in place. This refers to the way your teams operate internally, including Sales, Marketing, Product Development, Customer Service, etc. This will help foster accountability and trust between departments, and will contribute to creating a collaborative culture within the company.
As the different silos of the revenue-generating team start to work together to convert leads into customers, they will be able to better understand prospects' needs. As a result of a combined effort, the organization will start to benefit from shorter sales cycles, improved customer retention, and higher volume upsells.
Information is power. The more information you have, the better decisions you can make early on.
Thus, to stay on top of the inner workings of a business, Revenue Operations must ensure they are getting accurate data from their tools. By connecting and aligning all technology as one single source of truth, go-to-market teams will be able to have a clear picture of the revenue pipeline.
You can't build a house without building a strong foundation. To bring together and manage the Revenue Operations function, it is key to onboard the right people with the right skill sets. This includes everything related to hiring, onboarding, training, and developing your staff.
However, the profiles needed within a RevOps team will vary depending on the size of each company. On one hand, you could distribute the responsibilities of the RevOps role among your existing team. However, if you want to take a more strategic approach to your RevOps strategy, consider creating a team that includes positions like Sales Operations Manager, Account Executive, Marketing Analyst, Customer Success Manager, or Data Scientist.
What are the RevOps core areas of responsibility?
In order to successfully implement a RevOps strategy, there are certain core areas of responsibility that every member of the Revenue Operations team should take care of.
- Business Operations: this means taking care of the management of resources across a business to ensure all outcomes align with the overall company goals. It includes focusing on business process innovation, cross-functional collaboration, project management, and revenue planning.
- Efficiency Enablement: by setting practices for Sales teams, Marketing teams, and Customer Success teams to coordinate together, the entire company will notice a compounding effort in terms of efficiency and velocity.
- Insights Overview: this means knowing how a company is performing and understanding what makes it successful. Gaining operational insights will lead the Revenue Operations to make better and faster decisions. However, for this to happen, there must be good data, proper management, and easy accessibility.
- Digital Technology: the revenue engine will be responsible for all the tech stack used by Sales, Marketing, and Customer Success. This implies evaluating the need for having those tools, integrating them into the company's processes, and taking care of the systems administration.
Moreover, the way in which RevOps leaders ensure their function is effective is by agreeing on key metrics to track business growth. Some of the most common metrics include sales cycle time, customer acquisition cost, customer churn, win rates, ARR, renewals and upsells, forecast accuracy, pipeline velocity, and customer lifetime value.
5 steps to get started
There are two common approaches to getting started with Revenue Operations. Choosing one or another will depend on company size.
Early stage businesses
If an organization is still in an early stage of growth, one popular approach to implementing RevOps is to distribute its responsibilities throughout the already existing team.
This starts with one or several team members doing multiple roles during a particular period of time. Nevertheless, as a business continues to scale, the tendency is to slowly bring the RevOps responsibilities under its own umbrella and through dedicated roles.
Organizations with more than 100 employees
Another approach recommended for larger companies with more than 100 employees, is to hire a RevOps leader who can bring together all the existing siloed Ops in an organization. In addition to ensuring the success of the business, this umbrella role will also help build a culture where everyone understands the importance of working together to achieve common goals.
The initial process all Revenue Ops teams must follow
Regardless of which approach a company decides to take when building its RevOps team, it must complete a variety of steps before moving forward. The checklist is as followed:
- Focus on the big picture. Audit all the touchpoints in the customer journey to find improvement areas across departments. It is vital to remove all possible barriers that may prevent potential customers from converting.
- Set a full-funnel view of your company's health. Align the internal teams around a common revenue generation goal and ensure they all work on the defined lifecycle stages.
- Build a go-to-market plan with clear workflows to move leads throughout the process. This will streamline bottleneck identification and improve data accuracy within the revenue engine.
- Define a Revenue Operations growth strategy that works over time. Make sure your operations management team understands their contribution and role in the revenue generation process and is dedicated to improving workflows.
- Build one powerhouse growth team from siloed departments. Look for synergies and encourage cross-functional collaboration.
Accelerating the RevOps function with FP&A software
As organizations move toward digital disruption, Revenue Operations (RevOps) become more critical. Thus, establishing value-based operations and revenue management systems will allow organizations to gain insight into business performance and make more informed strategic decisions.
The Revenue Operations team has several areas of responsibility, including defining the roles and revenue-oriented processes to follow, deciding how to address bottlenecks in every possible scenario, and serving powerful performance insights to the management team.
As it gets more and more complex, revenue-generating departments tend to consider incorporating financial planning and analysis software as a way to identify current financial capabilities and limitations.
If you are looking to automate manual tasks to support revenue strategy, Abacum is here to help. Request a demo now to find out how our product can bring your RevOps function to the next level.