What is revenue operations 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 (or RevOps) brings together all internal go-to-market operations teams, especially marketing, sales, and customer success, under one umbrella. It encompasses the goals, roles, functions, processes, systems, data, and measurement of these teams to maximize revenue for the business.

What is 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.

Revenue Operations vs Sales Operations

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.

Revenue Operations Benefits

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

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.

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.

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

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