What Is Revenue Operations and How Does It Create Value

Summary

Synopsis:

What is revenue operations (RevOps), and how does it accelerate growth?
How to build a framework for implementing RevOps at your company
Best practices for revenue operations

According to a 2021 Gartner study, 75% of the fastest-growing companies will have a robust revenue operations model by 2025. Progressive organizations realize that operating with functional silos and handing off clients from one function to the other while using different technologies, people, and processes across the functions are barriers to revenue growth.

Aligning all client-facing roles, including sales, marketing, and client success, with technology and data provides an end-to-end view of the revenue engine. It also provides a seamless experience to clients, enhancing CX. End-to-end revenue enablement provides a continuous feedback loop across the buyer journey while creating a singular go-to-market framework for driving growth and customer acquisition.

This shift to a unified vision requires enablement leaders to provide support not only to the sales teams, but across all revenue generation roles, including marketing, sales, and client success verticals.

WHAT IS REVOPS?

Revenue operations (RevOps) is a business strategy to integrate and align all revenue touchpoints, including sales, marketing, and client success, with the aid of technology and data to accelerate revenue growth while enhancing the client experience. Granular visibility across the revenue pipeline and the client lifecycle enables a business to optimize the outcome of its sales and marketing funnel, from collecting high-quality leads to driving higher conversions and revenue.

Today, client experience (CX) is a critical competitive differentiator, as buyers armed with better access to information increasingly demand speed, agility, and personalization. Therefore, the role of delivering a unified experience in driving performance requires organizations to establish a cross-functional process based on optimal data flows and alignment.

The implementation of RevOps aligns:

People: Revenue roles like sales, marketing, and client success must work as a unified team under a single leader responsible for revenue growth.
Platforms: The RevOps team works off a single source of truth. Hence, a dedicated tech stack that collects, collates, and analyzes buyer and client data across all departments is required.
Processes: RevOps helps standardize branding, messaging, sales tactics, and client success across the buyer’s journey.

Benefits of RevOps

The core objective of RevOps is to make revenue growth predictable and sustainable. This is achieved by breaking down silos and integrating all revenue verticals into a unified framework to help scale revenue pipelines. According to a 2020 study by Boston Consulting Group, implementing RevOps accelerates revenue growth by delivering the following benefits:

100% to 200% increase in ROI from digital marketing
10% to 20% higher sales productivity
10% increase in lead acceptance
15% to 20% increases in internal client satisfaction
30% reductions in GTM expenses

A 2021 study by LSA Global also found that companies with tightly aligned revenue pipelines experienced 58% faster revenue growth and 72% higher profitability.

Below are the five RevOps pillars that support increased revenue and margins:

Unified vision: When the revenue-generating functions align with a unified revenue team, they create and execute a more informed, forward-facing growth strategy.
Enhanced client experience: Aligning the client-facing teams with a coordinated strategy delivers unified and consistent messaging to your clients, resulting in a seamless client experience. Additionally, marketing content, sales presentations, and client success responses can be customized to meet evolving buyer needs as they progress along their journey with your brand.
Singular truth and reliable metrics: A single tech stack coupled with centralized data recording means there are no conflicting data points, and all metrics are calculated from a single source of truth. This results in greater transparency and accountability.
Increased team efficiency: Alignment and transparency across revenue streams result in greater accountability and a more streamlined workflow. Less wasted effort naturally increases efficiency and responsiveness across teams.
More predictable growth: With accurate tracking of your client's end-to-end lifecycle and the ability to make quick adjustments, businesses become more likely to achieve goals and scale revenue.

Difference between RevOps and SalesOps

While there is some overlap between RevOps and SalesOps, each function plays a distinct and unique role in driving revenue growth. While SalesOps focuses on driving efficiency across sales functions, RevOps focuses on efficiency in all revenue streams, including marketing, sales, and client success verticals.

SalesOps is siloed

SalesOps systemizes the selling process by focusing on the roles, processes, and activities that support a sales team. SalesOps teams manage sales-centric processes, including compensation and incentive plans, territory allocation, lead nurturing and conversion, process optimization, and sales technology.

In short, SalesOps focuses on:

Optimizing the sales process

Managing the sales pipeline

Improving sales productivity

RevOps is inclusive

A common issue with siloed operations is that minor issues can take longer to address due to a lack of transparency across functions and systems. RevOps teams, in turn, are cross-functional, drawing members from sales, marketing, and client success, therefore eliminating silos. This transparency enables the RevOps teams to accurately identify the cause of an issue, the best way to resolve it, and prevent it from happening again.

RevOps is intentionally separated from the teams they serve to move from a function-centric vision to a unified, revenue-centric vision. Although structures vary, RevOps teams typically report to the CRO, a part of the organization's senior leadership.

Some essential RevOps functions include:

Managing the technology stack
Implementing data-driven processes and analytics
Coordinating efforts across multiple teams to ensure a seamless revenue cycle
Monitoring performance metrics and KPIs for accountability and ensuring alignment with revenue goals

Building your RevOps team and assigning roles

The typical RevOps team includes three roles:

A RevOps manager who leads the team
Operations managers from sales, marketing, and client success
A systems manager who acts as a neutral party and the software and data administrator

RevOps manager

The popularity of RevOps has led to an influx of professionals advertising their capabilities. This makes it more crucial than ever for organizations looking to build or adapt a RevOps team to determine the core skillset required for the role at their business. For example, at large organizations, the RevOps manager is the team leader and reports to the CRO, while at smaller companies, the role of the CRO and RevOps manager is often fulfilled by the same person. The RevOps manager is the custodian of the revenue targets across all business channels.

The RevOps manager leads a cross-functional team of managers and facilitates communication and collaboration between team members. The RevOps manager is also responsible for gathering data intelligence to make informed decisions. The RevOps manager's roles are, therefore, typically divided into four functions: insights, processes, systems, and enablement.

Insights

Data-driven insights are a core element of RevOps strategies. As a result, the function of the RevOps manager includes tasks such as:

Managing the ongoing audit of existing tech stacks, data, and content
Identifying and adopting integrated software solutions
Defining and tracking team KPIs
Setting and reviewing revenue forecasts and targets
Measuring and monitoring progress toward goal achievement

Processes

Another key role for the RevOps manager is to standardize strategies and processes across the entirety of the client lifecycle. This includes:

Setting goals and targets for teams, as well as identifying potential growth opportunities
Driving process and workflow efficiency by eliminating redundancies, clearing bottlenecks in sales and marketing, and client success interactions
Ensuring a seamless buyer’s journey and CX across internal departments

Systems

Determining the automation of routine tasks and centralizing all client contact data in a single tech stack is also the responsibility of the RevOps manager. This architecture also facilitates easy scaling. Some system-centric responsibilities include:

Ensuring the use of integrated software as a single source of truth
Identifying ways to automate processes
Building systems to improve data quality and depth of insights
Tracking and evaluating the complete client experience from end to end

Enablement

The RevOps manager is responsible for setting and achieving revenue growth goals. As a result, they need to ensure that team members are adequately trained. Process and system training includes:

Orchestrating the creation or sourcing of training materials
Coaching and enabling team members and staff

Critical skills for a RevOps manager

Effective RevOps managers should act as guides for your business. They must be skilled at driving revenue and growth, solving problems, and communicating with their teams. Some essential skills include:

Strategic problem solving
Effective communication
Team management skills
Tech skills at managing common software platforms, including CRMs, sales and marketing enablement, and automation software
Ability to make data-driven decisions

Operations managers

The operations managers from sales, marketing, and client success report to the RevOps manager. Building a RevOps team with equal representation from all three client-facing departments responsible for generating revenue is ideal. In most cases, the operation managers are existing departmental heads who assume new RevOps roles.

The key responsibilities of operations managers include:

Sharing their departments’ processes and data with the RevOps team
Collaborating on developing and executing client-centric solutions
Identifying and fixing any problems to clear bottlenecks that inhibit their teams’ performance.

Systems operations manager

The systems operations manager should act as the key custodian of the tech stack and the RevOps team's data hub. They are tasked with maintaining client data and providing analytic insights to the RevOps team. Systems operations managers are also responsible for developing new IT strategies and plans for updating the organization’s IT infrastructure in a timely manner. This should include upgrading hardware or software to strengthen the cybersecurity level of the company’s IT framework.

Developing effective RevOps strategies

Implementing RevOps does not necessarily mean the adoption of entirely new strategies but rather the optimization of existing processes to drive revenue growth.

Below is a three-step guide to how RevOps strategies can add efficiency to your sales cycle.

Get an accurate view of data across your organization

Achieving accurate oversight of existing client data is the starting point for crafting strategies based on client insights. This means breaking down silos and centralizing fragmented data lakes. Consider using AI-powered tools and analytics to ensure your CRM accurately captures client contact and activity data.

Segment your data into two different clusters:

Capturing activity and contacts: This includes client data gathered from emails and calendars. The RevOps tech stack should regularly update your CRM with activity reports that provide insights and potential opportunities. These insights can then be fed into the sales process to execute multichannel communication with your clients and prospects, boosting engagement and accelerating the sales cycle.
Collecting conversation intelligence: Conversation intelligence tools record, transcribe, and analyze client calls and generate insights from this data. These insights create opportunity health scores, perform sentiment analysis, and prescribe recommendations.

It is vital that the entire RevOps team has access to this data to deliver a consistent experience across the three sales funnel stages:

Awareness: The key RevOps strategy during the awareness stages is to create an excellent first impression of the brand by providing value to the prospect. A consistent brand message with value-added content will aid in driving the prospect to the next stage.
Consideration: The prospects at the consideration stage review the unique features of your solutions against your pricing and compare them with your competitors. Behavioral insights provided by RevOps at the prospect level enable businesses to customize onboarding processes and product relevance. Prospect-level insights also allow sales teams to understand their specific needs for guided conversations.
Decision: Insights provided by the RevOps team can also enable the sales team to close more deals at this stage, thanks to the customized and personalized nurturing through the previous stages.

Automate workflows across your tech stack

Once data unification has been achieved, workflows can be automated to deliver more predictive outcomes. This helps client-facing teams allocate more time and resources to high-value tasks, such as nurturing, that enable better personalization and a seamless client experience.

A key element of enabling automation to be efficient is sourcing the correct tools. RevOps tech stacks need to be aligned with the company's goals. With the right tools, businesses are able to automate workflows in a way that is low-code and customized to their unique needs (see more below).

Centralize analytics for all revenue-generating departments

The core task of RevOps is to centralize all revenue generation processes within the organization. A single analytics system that collects data from multiple pipelines can provide insights into overall business performance while highlighting the revenue channels that require optimization.

To capitalize on this benefit, start by centralizing data, workflows, and technology:

Pipeline and forecast management: Ensure all data points are integrated and flow into one data lake. This helps in identifying patterns that can be used in decision-making.
Analytics: Leveraging the right platforms allows for data to be analyzed to provide insights on revenue generation opportunities to the relevant client-facing teams. Data and insights should be easy to access for the sales, marketing, and client success teams to create campaigns and sales cycles while leveraging cross-sell and upsell opportunities.

Focusing on these three steps helps to set a strong foundation for iterative RevOps strategies that scale in performance.

Building your RevOps tech stack

Since RevOps centralizes revenue operations across sales, marketing, and client success, the tech stack should support the integration of applications from these three areas. A CRM and a low-code automation platform are the other critical parts of a RevOps tech stack. A well-designed tech stack enables RevOps teams to streamline processes, improve efficiency, and drive revenue growth.

The five elements of a RevOps tech stack are:

Marketing automation platform (MAP)

Marketo from Adobe and Eloqua from Oracle are two MAPs that help automate and streamline marketing processes, including email marketing, lead generation, scoring, and nurturing. MAPs are a critical part of the RevOps tech stack and play a leading role in lead lifecycle management.

Client relationship management (CRM)

Salesforce and Hubspot are two widely used CRMs that help centralize client data while providing crucial insights into client behavior and preferences that are used for making informed decisions during the sales cycle. The CRM is the single source of truth for RevOps teams.

Sales platforms

Sales platforms like Outreach and Showpad help your sales teams become more efficient by providing the data, content, and insights they need to sell more effectively. The RevOps team can use these platforms to track and analyze sales strategies to deliver the best results. These insights are shared with the sales team, and data is collated and analyzed in real-time by integrating the sales platform with other tools in the tech stack.

Low-code automation platforms

Low-code automation platforms like Tosca and Katalon are a major asset to the RevOps teams and their secret weapon. The primary goal of RevOps is to remove silos around data and processes; however, overly complex legacy tech stacks and rigid integration apps constitute a significant concern for RevOps teams. The manual workaround is to move data and build custom solutions workarounds. This makes operations inefficient in both time and cost. Low-code automation platforms offer the flexibility to connect any application in the tech stack and automate and customize processes across the tech stack. The improved efficiency delivers accelerated revenue growth.

Data analytics

Client data gets collected across multiple touchpoints by different applications, making it challenging to achieve an accurate 360-degree view of the client. Business Intelligence (BI) platforms like Power BI, Looker, and Tableau empower the RevOps teams with analytics tools to gather insights into client behavior, business operations, and campaign performance. The client-facing teams are then able to use this information to make informed decisions, optimize processes, and drive revenue growth.

In summary, an integrated tech stack gives RevOps teams granular and real-time insights into client behavior and helps provide a 360-degree view of interactions throughout the buyer’s journey.

How RevOps accelerates your deal velocity

To maximize revenue growth, companies must fine-tune their sales funnel in real time. Deal velocity measures the average time to convert leads from the first outreach to the purchase. Accelerating the deal velocity means converting more leads in a given time frame, resulting in faster revenue growth. With tech stacks and process automation, the RevOps team can track each lead in real time and identify pipeline blockages that slow the conversion process. Consequently, the ability to streamline conversion processes accelerates the deal velocity and revenue growth.

5 RevOps strategies to boost deal velocity

Here are five strategies for RevOps teams to boost deal velocity:

1. Sharpen lead qualification

The quality of leads in the sales funnel directly impacts conversion rates. The RevOps team can help sales and marketing teams by ensuring that the incoming leads are well-aligned with the business’ ideal client profile (ICP). Additionally, the RevOps team must also qualify leads based on lead scoring, wherein the leads are scored based on their engagement level with the website, product pages, and social platforms. These insights enable sales teams to focus on leads according to their propensity to buy.

2. Foster interdepartmental collaboration

The RevOps team is responsible for centralizing all revenue pipelines. The cross-functional nature of the RevOps team fosters collaboration between all client-facing teams and enables open sharing of revenue intelligence. The RevOps team can provide end-to-end clarity across the client lifecycle, leading to greater interdepartmental collaboration. The collaboration enables businesses to develop a unified strategy to optimize performance and revenue growth.

3. Minimize barriers in the client journey

While better teamwork will smoothen transitions between the different stages of the client journey, it may not eliminate deep-rooted roadblocks. The RevOps team has a granular vision of the sales pipeline and can identify the stages where leads may be churning. Analytics tools like BigLittle can locate these friction points, and depending on the funnel stage, the relevant client-facing teams can formulate strategies to overcome them. For instance, if leads are dropping off at the demo stage, then sales teams need to take a closer look at factors such as the onboarding process or the product’s ease of use to improve deal velocity.

4. Regularly monitor vital metrics

A singular focus on the deal velocity metric is not enough, as other metrics and KPIs also impact conversions. RevOps teams must also measure metrics such as:

Conversion rate of Sales-Qualified Leads (SQLs)
Average Deal Size

Win Rate
Length of sales cycle

Monitoring these metrics enables the RevOps team to identify the underperforming metrics, enabling businesses to remediate them to fuel scalable and profitable growth.

5. Develop sales enablement resources

The RevOps team can help the sales team accelerate deals with sales enablement content. This content can include sales coaching and product training with product demos, objection handling, and case studies that help address client concerns faster and more effectively.

Key metrics and measurements in RevOps

The RevOps model helps drive, measure, and forecast predictable revenue across all business levels.

The five key RevOps metrics that you should monitor include:

1. Cost Per Acquisition

Cost per acquisition (CPA) or client acquisition cost (CAC) is the cost incurred to acquire a new client over a defined period. Tracking CPA enables companies to make informed decisions on the efficient allocation of resources to marketing and sales initiatives.

2. Annual Recurring Revenue

Annual recurring revenue (ARR) is the revenue a business expects to realize from all its revenue streams, like contracts, subscriptions, and other recurring billing cycles over a year. Tracking ARR enables companies to glean insights into business growth.

3. Client Lifetime Value

Client lifetime value (CLV or CLTV) is the total revenue generated from a client over the period they are associated with the business. For instance, if the average lifespan of a company’s clients is five years and the average annual revenue from a client is $5,000, then the CLTV is $25,000. Monitoring CLTV is essential as it enables the optimization of retention, acquisition, and pricing strategies and helps predict future cashflows and revenue.

4. Win Rate

The win rate is the percentage of leads converted to clients against those acquired at the top of the funnel over a defined timeline. The win rate measures the efficiency of sales teams in converting leads, and a high win rate is a good indicator of sustained revenue growth.

5. Client Churn

The churn rate is the percentage of the client base who stops doing business with the company over a specific time. High churn rates indicate problems upstream, ranging from product issues to poor client service or because the client found a better alternative. Whatever the reason, a high churn rate requires a deeper investigation into the cause and remedial action.

Best practices in RevOps

A pivot to the RevOps model requires commitment and perseverance. If you have decided to adopt RevOps as a strategy for growth, here are some best practices to follow while making your pivot.

Customize your RevOps team structure

Create your revenue operations organizational chart based on the unique needs of your business. If your tech stack is complex, you will need additional systems resources to manage it. Typically, RevOps teams will comprise of individuals from these four functional teams:

Operations team (sales, marketing, and client success)
Technology team

Planning and analytics team
Client success team

Ensure flexibility and alignment with GTM stakeholder goals

A shift to RevOps requires you to build flexibility into business processes. Flexibility is essential for breaking down the siloed approach and facilitating team collaboration. Be purposeful and intentional about engagement and interaction with the teams.

Encourage communication and enable your teams

Transitioning to a RevOps model comes with its challenges, and you need to be hands-on in the initial stages until the revised processes and collaborations take root. To accelerate the transition, you must train teams, have direct conversations, and share revised policies and guidelines to bring all stakeholders on the same page. The RevOps team also needs to regularly update the organizational stakeholders on the progress of major projects to provide context to results.

Create a unified RevOps playbook

Having a consolidated RevOps playbook drives visibility across revenue and GTM processes. This playbook should also help in defining your priorities and helps your RevOps team build organizational collaboration by creating internal dependencies.

Automate wherever you can

Process automation helps in driving efficiency, identifying opportunities, achieving results, and keeping teams in sync. Automating low-value processes allows the client-facing teams to focus on tasks that will nurture clients and leads and provide an excellent client experience.

CONCLUSION

RevOps provides a transparent and end-to-end picture of the company across its people, data, processes, and platforms. RevOps pivots around the central goal of driving sustainable revenue growth. The cross-functional collaboration provided by RevOps helps in reorganizing companies and providing a better understanding of the client and their revenue lifecycle.

Companies can no longer afford to work in silos where clients are passed from one function to another in the selling process. Instead, businesses must break down silos to get a clear vision of the revenue streams and to create a coherent, seamless buyer’s journey.

FAQs

What are the benefits of adopting a RevOps model?

RevOps offers multiple benefits to an organization, including accelerated revenue growth, improved cross-functional collaboration, enhanced client insights, shorter sales cycles, higher client retention rates, and optimized technology stack utilization. Some of the big-ticket benefits of revenue ops include accurate forecasting of business growth, driving revenue, and adapting to market changes.

How can RevOps enhance collaboration between sales and marketing teams?

RevOps breaks down silos and fosters collaboration between sales and marketing by setting shared goals, promoting cross-functional visibility, and implementing clear communication channels.

What are some common challenges to implementing RevOps?

The five common challenges to implementing RevOps include:

Breaking siloed data and processes
A lack of alignment between the three client-facing functions, sales, marketing, and client success
Scaling and streamlining your RevOps strategy
Integrating and adopting technology
Measuring, analyzing, and monitoring key metrics

What are the four building blocks of RevOps?

The four building blocks of RevOps include:

People: The RevOps team is the hub for all revenue-generating processes. The team channels inputs from different client-facing teams and provides insights for making informed decisions that accelerate revenue growth. The RevOps team also helps in reducing friction across all client interactions and helps in building collaboration across client-facing teams that delivers a seamless client experience.
Tech stack: As a company scales, it becomes essential to centralize data, update existing tech stacks, and update processes. Hence, you need to build a consolidated tech infrastructure that lets you automate data handling and routine tasks while using analytic tools to gain client insights based on their engagement with your brand.
Processes: Business processes help drive efficiency in tasks and eliminate friction that hinders revenue growth. RevOps processes help build collaboration between teams and provide end-to-end visibility across all revenue streams.
Analytics: RevOps also provides end-to-end visibility across data, thereby making it easier to analyze data and derive business insights and opportunities that can accelerate revenue growth.