Revenue operations: what is it and why do you need RevOps for your business?

Creating an overarching operations structure provides stability and focus for each and every department.

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Growing revenue has always been the top priority of all business leaders, so it should be no surprise that more companies are trying to implement revenue operations. Forrester’s 2021 revenue operations survey of 316 respondents even discovered a significant shift towards driving the value and promise of revenue operations from within either centralized operations or selective centers of excellence.

So what is revenue operations, and why should you care? If it’s critical for business growth, how can you start adopting it? All the answers to these questions will be covered in this post.

What is Revenue Operations?

Revenue operations refer to bringing sales, marketing, and customer service together to drive revenue growth for a business. It ensures all of these teams work towards the same goals and gives managerial stakeholders a complete view of revenue streams.

Revenue Operations Benefits

Running revenue operations successfully can bring a competitive advantage to your business.

  • Better alignment
  • Long-term strategic planning
  • Higher customer retention

Think about everyone across your revenue-generating teams sharing the same goal, focus, priorities, systems, and processes. They work in sync with each other without any miscommunication, and even when a problem arises, they can still quickly come up with the best solution.

All things considered, you’ll achieve cost savings and more efficiency across your company. You’ll also see an increase in your team’s productivity and acquire more happy customers, which eventually leads to an acceleration in your revenue growth.

Revenue Operations Metrics

The followings are five revenue operations KPIs you want to include in your implementation plan:

1. Cost Per Acquisition

Cost per acquisition (or customer acquisition cost – CAC) is the cost required to acquire a new customer over a specific period.

2. Annual Recurring Revenue

Annual recurring revenue (ARR) is the yearly revenue you can expect to generate from subscriptions, contracts, and other recurring billing cycles.

3. Customer Lifetime Value

Customer lifetime value (CLV) is the amount of revenue you can plan to earn from the average customer throughout their relationship with your business.

4. Win Rate

Win rate is the percentage of opportunities you turned into won deals, divided by the total opportunities (both won and lost) you created over a timeframe.

5. Customer Churn

Customer churn is the percentage of customers who stop doing business with you over a specific period.

How Do You Implement Revenue Operations?

Step 1: Determine Your Goals and Objectives

In other words, understand clearly why you need revenue operations and what you want to achieve from it.

For example, you may see a disconnection across your sales, marketing, and customer service teams. Sales reps get inaccurate data from marketers; customer information isn’t updated in real-time; workflows are misaligned or overlapped between marketing and customer support, etc.

All of these problems can happen when you don’t have revenue operations in place.

Step 2: Decide the Tools Needed

Once everyone is convinced, you can start looking for revenue operations tools that help you make your plan possible.

When doing that, remember to choose the platforms that give you a centralized place to store data across departments. It should also synchronize data automatically across channels in real-time and allow your teams to update easily whenever they want.

Step 3: Build a Revenue Operations Team

There are some factors you should consider when building a revenue operations team.

First, you need a revenue operations team leader who understands your business inside out and owns a robust RevOps mindset.

Second, how many people you should hire depends on your budget and the problems you’re having. The more gaps you see between departments, the more specialists you might need to bring in to solve those gaps.

Once you’ve formed an A-team, bring everyone together to map out a sure-fire revenue operations plan. It’s important to start small and step by step to ensure the execution is successful.

Try Revenue Grid: Revenue Operations platform

    Potential Issues When Implementing Revenue Operations

    Revenue operations is well worth the effort required to implement it fully, but it can be a complicated process. This shouldn’t come as a surprise after all as it relies on the full support of one’s company and also includes several complex technical aspects. As is the issue with sales everywhere, the trick to success is patience and determination.

    It’s crucial that you invest in high-quality training for the entire company, designed to educate your team about the benefits of revenue operations and how they work with it. This also means that you have to invest heavily in the quality of the software you use to guide your revenue operations. There’s no point in educated hands using poor-quality tools after all.

    Don’t assume you can copy and paste a new revenue operations department onto your company’s structure either. In some companies, there is little to no difference between sales and marketing, but under a revenue operations guided system, these departments need to be clearly marked and separate. The same applies to every other department at your business; everyone needs to know their specific task.

    Revenue Operations Manager Job Description

    Typically, a revenue operations manager job description includes the following responsibilities and requirements:

    Revenue Operations Responsibilities:

    • Lead a team of revenue operations specialists and oversee sales funnel and operational metrics.
    • Provide analytical thought leadership for go-to-market plans, sales plans, and marketing activities, delivering actionable insights to establish strategic operational priorities.
    • Develop processes, workflows, and incentive programs to help motivate teams and boost business performance.
    • Work closely with sales operations manager, marketing manager, customer service manager, and other relevant departments to monitor business strategies, revenue growth, and KPIs.
    • Participate in company programs and initiatives, including webinars, sales coaching workshops, and other educational activities.

    Revenue Operations Requirements:

    • At least 5 years working in business management, sales operations, sales planning, or revenue operations.
    • Expert-level knowledge of Salesforce and CRM.
    • Strong analytical, operational, problem solving, planning, time management, and project management foundation.
    • Highly proficient in financial modeling, revenue modeling, sales approaches, and reporting.
    • Excellent written and verbal communication, interpersonal, and negotiation skills.
    • Strong ability to work collaboratively and independently.

    What Does a Revenue Operations Manager Do?

    Here’s what a revenue operations manager does on a daily basis:

    • Determine sales and marketing strategies that help increase revenue.
    • Review and improve workflows so that sales, marketing, and customer service teams can collaborate effectively.
    • Identify technological solutions that help improve relevant teams’ performance and enhance the customer experience throughout the buying journey.
    • Collect and analyze data across departments to help maximize sales productivity.
    • Manage a revenue operations team, from guiding their activities to tracking their performance.

    Who Needs a Revenue Operations Manager?

    Not every business needs a revenue operations manager. This position is most common in enterprises, fast-growing companies, and B2B SaaS environments.

    Revenue Operations Team Structure

    An ideal revenue operations team can have revenue operations specialists and a revenue operations manager. But depending on your business, you may want to hire other positions like revenue operations analyst, revenue operations data manager, and director of revenue operations.

    Revenue Operations Manager Skills

    To prepare for this role, you should equip yourself with a deep understanding of workflow, process, and system administration. You should also familiarize yourself with sales reporting, sales forecasting, sales process, and other areas of sales management. Proven experience with Salesforce, CRM, and revenue intelligence software can help make your profile stand out.

    Regarding soft skills, you should be able to work effectively within a sales team environment and across departments. You should also have strong communication, problem-solving, analytical, planning, and presentation skills.

    Revenue Operations vs Sales Operations

    Sales operations (or Sales Ops) is designed for supporting sales reps to do their job effectively and efficiently. It creates structures, processes, best practices, and guidance on how sales reps can spend more time selling and less on non-revenue-generating, labor-intensive tasks.

    Both revenue operations and sales operations teams are tasked with driving revenue for an organization. But there are two key differences between them:

    • Sales Ops is all about sales reps-related activities and limits to one element of your total revenue strategy. Meanwhile, RevOps is about the holistic picture of business practices across every revenue-generating team.
    • Sales Ops focuses on deal management, territory planning, sales forecasting, CRM, training and development, and Salesforce. Meanwhile, RevOps looks at the entire customer journey, revenue funnels, go-to-market execution, and customer experience.

    Previously, revenue operations and sales operations were used interchangeably. But today, RevOps has evolved to become its own core function and a critical part of the revenue growth of all businesses.

    So You’ve Implemented Revenue Operations – What Comes Next?

    If you successfully implement revenue operations, two things will quickly become apparent. Firstly, your other metrics will improve considerably. Secondly, you’ll realize you’re now handling more significant amounts of data.

    Therefore your next prudent step will be to invest in tools specifically designed to allow you to handle data to the maximum level possible. These tools should provide integration to your CRM system, organize and optimize your email, and guide your selling based on analytics. The Revenue Grid will help you do this.

    Report by Forrester: Revenue
    Operations and Intelligence

    img-footer-forrester-report-2

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