Revenue Operations is one of the latest trends in the business world and is being used to make sales more efficient and effective by breaking down silos between different departments.
The COVID-19 pandemic opened new doors for many new opportunities that we hear about every day, such as NFTs. Talking about the business world, we often get to hear about different sales and marketing methodologies. One of them is RevOps.
In this article, we will provide you with the definition of revenue operations and its benefits, the ideal revenue operations team structure, the difference between RevOps and operating revenue, along with the operating revenue definition.
Have you ever wondered, what is revenue operations? If so, you have come to the right place!
What is Revenue Operations?
RevOps or Revenue Operations is all about alignment on the operational level.
The holistic approach links marketing, sales, and customer success operations and breaks down barriers between departments by including them across the funnel to drive accountability for getting revenue throughout the entire customer journey.
By adding revenue operations to your company, you will be able to:
- Optimize your sales funnel.
- Collect high-quality leads.
- Earn more revenue.
According to a study conducted by Forrester, companies that deployed this emerging trend saw an increase in their revenue approximately three times faster than companies that didn’t. Companies with RevOps also saw a 71% higher stock performance.
Ever since this framework was popularized, more and more organizations have created revenue operations teams and rolled their employees from the marketing, sales, and customer success departments into them, all headed by the Chief Revenue Officer (CRO).
A Chief Revenue Officer is a new, interesting, and critical role and has been steadily becoming popular during recent times. According to LinkedIn, a Chief Revenue Officer, a Director Revenue Operations, and a VP Revenue Operations are among some of the fastest-growing job titles on the platform.
According to a research study by SiriusDecisions, conducted in October and December 2018, CRO roles slightly outpaced Chief Sales Officer job titles. However, Director Revenue Operations job titles surpassed Director of Sales Operations by 68%.
Why is Revenue Operations Suddenly Becoming So Popular?
The pandemic impacted all aspects of our lives. Some of these changes were sudden and we had absolutely no control over them, such as wearing masks, maintaining social distancing, not being able to travel, etc.
However, for a lot of people, it led to the adoption of several new behaviors, such as shopping and banking online.
Due to the pandemic, several changes were seen in customers’ buying behaviors. According to the Swiss Re Institute, many surveys found that consumers on a global landscape shifted to value-based purchasing.
Thus, due to COVID-19, customer buying behaviors entirely changed. Consumers no longer make a purchase without conducting their own research. They search for reviews, blogs, and other information way before a person from your sales team reaches them.
In many business models, such as subscription-based businesses, what happens after the sale is just as crucial as what happens before it.
What this means is that your marketing, sales, and customer success teams need to be aligned throughout the whole funnel for your organization to succeed.
Benefits of RevOps for a Business
A revenue operations team can help all the revenue-generating functions of the organization run efficiently.
Following are some of the benefits of RevOps:
1.Sales Knowledge and Skills
A revenue operations team is familiar with all stages of the sales funnel; thus, if something goes south, you know that you will have a team with sales-related skills and knowledge to fix the issue quickly.
Thus, the salespeople will have more time to focus on engaging with potential customers.
2.Best-in-Class Customer Experience
When departments that previously had a barrier in between start working together and are aligned, they pay more attention to the needs of their customers.
So, if your customers are provided with best-in-class customer experiences, they will be delighted with your service.
3.Faster Growth and More Profits
According to SiriusDecision, organizations that have a revenue operations team grow 19% faster than ones that don’t.
As well, companies that align all revenue-generating functions outperform those that don’t, with 15% more profits.
4.Data-driven Decision Making
Being creative is great, but sometimes the strategy is just as important; thus, it is essential for you to have some information before you make a decision about a campaign.
For instance, ask yourself, what are your objectives? Who is your target market? What platforms does your target audience use? What benefits are you providing them?
There is only one thing that will provide you with the answer to all of your questions: data.
For example, after boosting an ad on Facebook for your website, you might see that your post received 100,000 impressions; however, you need to see the whole picture. How many people clicked on your website? How many of them added a product to their cart? How many abandoned their cart? Why did they abandon their cart? Are the delivery charges too high?
Without data, you will be unable to figure out the reason why people are not purchasing from your brand.
Instead of multiple people looking at different data and trying to piece them together, your revenue operation team will approach data in a unified way by giving it a holistic view. Because of this, you will be able to create a strategy that is backed up by data.
A lot of us have been in a situation where the marketing team is talking about their reach and impressions, and the salespeople are talking about finding prospective customers.
In many situations, nobody is aware of how they all intertwine, and when it comes to the quarterly or monthly report, the marketing team starts blaming the sales department, and the sales department blames the marketing team.
This is what happens when the departments are not aligned. With revenue operations, you will witness visibility and know exactly what each employee is doing. Because of visibility, you can ensure that every party is held accountable.
If the departments don’t work together, they will have no understanding of the processes and functions of their counterparts, and they won’t know that their data align with each other.
Thus, if there is no shared understanding, the organization will face reduced outcomes as there are no shared objectives.
With a RevOps team, the focus is on removing communication barriers and creating a shared understanding in terms of insights, data, metrics, and objectives to ensure every person is working towards the same goal or objective.
How Do I Know If My Company Needs RevOps?
Even though the concept of RevOps is extremely popular now, it is still relatively new.
So, if you are wondering whether your company needs that alignment, the following are some of the ways you can tell:
1.If Your Goals Across Different Departments Aren’t Aligned
When different departments, such as sales, marketing, and customer success, aren’t aligned without much communication, it may seem like all of you are on the same page. However, reality is always different from perception.
For example, suppose there is little or no communication between the teams. In that case, it is possible that the marketing department could be meeting their targets, such as Instagram likes, app downloads, etc. But, if the sales department isn’t achieving its set of goals, then the efforts of the marketing team would not matter much in the bigger picture.
Thus, if there is no alignment, then the entire company could be at risk.
2.If the Business Metrics Don’t Match
In many organizations, marketing, sales, and customer success departments focus on achieving their departmental targets with their own objectives, budgets, and resources. Unfortunately, this could lead to business metrics and data that don’t match up.
However, a RevOps team sets joint targets, makes decisions, measures, and analyzes the full funnel to achieve those joint targets.
3.If There is Never-ending Finger-pointing in Your Organization
No communication and disjointed data could lead to a lot of bickering and mistrust between members of the organization.
However, if your team is working towards a shared goal, there will be a lot less time spent bickering and fighting, and the focus will be on the primary goal.
Thus, by aligning a RevOps team, your team will be working towards the same goal, leading to less friction between the members. You will also be able to end the toxic work environment by building an environment based on trust and accountability.
Getting Started With Revenue Operations
Even though the right way depends upon the size of your company and your business model, there are two ways revenue operations can be started:
In the case of distributed capabilities, one individual takes on multiple roles. For example, a marketing copywriter may also be responsible for insights and running advertisements.
In this case, you hire a leader who brings the RevOps roles together and consolidates reporting relationships.
This works best if your organization consists of more than 100 employees, as it is possible that you have organizational silos.
3.What Does a Revenue Operations Team Structure Look Like?
Now that you have a good understanding of RevOps, take into account your revenue-related strategy, your organizational needs, and the current organization structure, especially your sales, marketing, and customer success departments.
It is essential for you to hire managers with relevant backgrounds in their functional area because:
- They know the core competencies needed to be good at the positions that report to them.
- They understand the investments that should be made to support those positions (e.g., education, training, technology, etc.).
The size of your organization plays a huge part when constructing a revenue operations team structure.
For example, a small business can delegate revenue operations-related functions to the existing managers. At the same time, a large organization can exclusively designate revenue operations functions into one department.
You can structure your revenue operations team with some degree of freedom to facilitate the implementation of your revenue operations strategy.
Following are some key roles and functions that are critical for your revenue operations team structure:
1.Chief and Director of Revenue Operations
In small businesses, the role of the chief and director are often played by the same person. Thus, the individual hired as the lead is often the person who is in contact with different departments and teams within your company. It is a crucial role for your organization.
Following are some of the characteristics of a RevOps leader:
- First, ensure that the tasks performed by teams are aligned with the goals of the company.
- RevOps leaders are often all-rounders and perform several critical tasks within the organization.
- Many RevOps leaders also perform the duties of a project manager and prioritize and filter the tasks and requests to ensure efficient workflow and avoid distractions in the workplace.
On top of performing their own functions, your revenue operations team will collaboratively be working with other teams across the organization. Thus, the RevOps team will likely get requests for several tasks, such as reporting, strategy, and assistance in technical issues.
As mentioned above, a particular person should be hired to prioritize and filter requests to ensure efficient workflow and avoid hurting the team’s efficiency.
To move your organization in the correct direction, it is essential for your revenue operations team and the entire organization to keep an eye on the performance insights.
However, the whole process of continuously monitoring performance insights can be hectic and time-consuming. Thus, have an analytics/insights team in your organization to save time and for efficiency.
The insights/analytics team can also optimize your marketing, sales, and customer success data by assisting you in making better business decisions based on data
4.Operations Management Team
The operations management team works across the organization at both macro and micro levels. The team also manages resources, ensuring your customer-related and revenue-related operations are all aligned according to the needs of your business.
5.Revenue Enablement Team
The revenue enablement team focuses on the following functions:
- Bringing relevant information, tools, and practices to your sales, marketing, and customer service functions.
- Helping your organization generate revenue more efficiently and at a higher velocity.
6.Revenue Systems Team
This team manages all the technology related to your sales, marketing, and customer success processes.
You can update your revenue operations team structure as your business grows. You can also include other roles and functions than the ones mentioned above to ensure that all parts of your company’s operations are working seamlessly.
5 Components to Implementing a RevOps Approach
Now that you know the benefits of a revenue operations approach and whether your organization needs it or not, it is now time for you to devise a plan to implement a RevOps approach.
Keep in mind that implementing this approach will allow your business to deliver better customer experiences and transfer an individual from a potential lead to a highly loyal consumer.
So, if you want your company to succeed, you need to focus on the following components:
Following is how you can implement revenue operations in your organization.
As mentioned above, the departments of marketing, sales, and customer success should be brought together to form a revenue operations team so that they can collaborate and closely work together.
Thus, among the employees, you need to emphasize the following traits:
- Importance of interconnectivity
- Team player mentality
When the time comes for a performance evaluation, the HR department should refer to them as “one team” and judge their performance based on group and individual metrics.
After that, you need to implement processes to ensure that your revenue operations are collaborating.
After creating the revenue operations team structure, work with the leads of each division to create a data-sharing process. You can also utilize technology, such as CRM systems, for customers and potential leads.
Continuous feedback should be provided to improve the processes of the team as it is essential for an organization’s growth, improvement, and increase in its revenue.
Data is one of the most challenging parts of developing a RevOps approach. Having a good understanding of your data across aligned sales, marketing, and service divisions will provide you with several benefits:
- Better forecasting
- Better revenue predictions
- Quicker identification and solving of problems and risks
Your organization can also collect and leverage high-quality data about your potential and existing customers. You can collect their:
- Job title
- Company name
- Likes and dislikes
- Pain points
- Activities, and much more.
The data can be collected through surveys, forms, and web pages, and all the data must be shared across the RevOps team.
On the basis of the data, your organization can also calculate:
- The customer lifetime value
- Cost of acquisition
- Sales cycle time
- Win rates
All the data collected by the marketing and sales individuals should also be shared with the customer service division to ensure that the best-in-class customer experience begins as soon as a lead converts.
You can monitor the success of your revenue operations team with specific monthly KPIs, such as:
- The number of new leads
- The number of follow-up meetings with potential leads and clients
- The number of converted leads
- The number of forms submitted
- Overall customer satisfaction scores
- Customer onboarding survey scores
The basics of a revenue operations technology stack should include
- CRM system
- Marketing automation tools
- Customer communication tracking
- Website analytics
Your CRM should also be accessible by your RevOps team for them to perform their functions efficiently.
The data can flow in from:
- Your website
- Referring websites
- POS system
- Social media
- Communication methods, such as email, text messages, calls, etc.
- Other marketing services, such as blogs, reviews, etc.
On the basis of the data, the RevOps divisions can identify the next step.
Revenue Operations vs. Operating Revenue – What’s the Difference?
Many individuals tend to get confused between the two terms, as they sound very similar; however, these concepts are entirely different.
By this time, you are probably familiar with revenue operations, so let’s look at the operating revenue definition and what makes it different from RevOps.
Operating Revenue Definition
Operating revenue is the revenue a business generates from its primary business activities.
For example, tailors derive their operating revenue by sewing clothes; mechanics obtain their operating revenue by repairing vehicles and performing diagnostic tests on them.
What constitutes the operating revenue depends upon the industry of the business/company and the business/company itself.
On the other hand, revenue operations are end-to-end business processes responsible for operations across all revenue-generating departments, such as marketing, sales, and customer success.
The idea of RevOps has been becoming increasingly popular ever since 2019. By breaking down the walls between marketing, sales, and customer success departments, the revenue operations approach is helping businesses become more effective, efficient, and successful.
The revenue operations approach has a lot of benefits as mentioned in this guide; however, it can be pretty complicated and straining. However, you need to remember that an organization built on the RevOps approach will provide you with an optimized and lean structure for success.