Still evolving but rapidly gaining in popularity, Gartner describes Revenue Operations (RevOps) as the newest functional role emerging in many of the fastest-growing B2B organizations. If you’re new to the term or have been looking for a refresher, read on to find out what revenue operations is, why it was developed, the key players, its benefits, and how you can determine if RevOps is right for your business.
So, What Is Revenue Operations?
While there are varying descriptions of what revenue operations is, the unifying thread is that the RevOps methodology combines and aligns revenue goals across sales, marketing, customer service, and depending on your company’s organizational structure – product operations.
With a goal to reduce departmental siloes and drive revenue growth, it provides a holistic way of prioritizing work to achieve organizational KPIs – as opposed to legacy team-based KPIs. RevOps works towards improving the buying experience by closing experience gaps across the customer life cycle and holding all teams accountable to achieve revenue targets.
What Is Revenue Operations, and Why Now?
It may surprise you to learn that RevOps has existed for decades in one form or another, however it’s only been recently that it’s been given an official term. In fact, job titles that contain the word ‘revenue’ are becoming more prevalent than ever. Data collected by Forrester determined that between October and December 2018, revenue operations job titles were increasing faster than their sales title counterparts – Chief Revenue Officer 33% vs. Chief Sales Officer 31%, VP Revenue Operations 21% vs. VP Sales Operations 9%, and Director Revenue Operations 73% vs. Director Sales Operations 5%. With growing popularity, the RevOps impact doesn’t end there.
The past year and a half has shown that on LinkedIn, VP of Revenue Operations titles have increased a whopping 300%! And it’s not just job titles. A recent study from Forrester SiriusDecisions commented on the growth of companies with a Chief Revenue Officer (CRO) and/or RevOps functions vs. those that don’t.
The pattern is clear: Publicly traded companies with revenue operations outperform those without revenue operations by a considerable margin. Revenue growth for such organizations was 2.7% higher, and stock performance was 1.7x higher.
We’re all familiar with traditional siloed departments that result in contrasting goals, inconsistent customer experiences, and disconnected metrics. Which ultimately means that while one team may surpass their goals, others may not achieve theirs. Essentially, the company as a whole suffers and revenue that could have been recognized remains on the table. Aside from these very real issues, there are other factors as to why RevOps is now seeing a meteoric rise.
- In recent years marketing technology has become a key contributing factor to the success of the business.
- Instead of staying status quo and hoping that revenue will increase; sales, marketing, and service leaders are realizing the need to unite siloed departments so that they become more efficient and focused on a common goal – revenue growth.
- Customers are more demanding than ever before, and will rapidly churn when faced with a negative experience.
These considerations opened the floodgates, making RevOps a viable solution to improving the customer experience, enhancing operational efficiencies, and eliminating bottlenecks; providing a clear path to new revenue opportunities. In addition, the explosion of the SaaS business model has heightened the awareness that what happens after the initial sale is just as, if not more important than what happens during the sales process itself. Think about it, SaaS companies rely on recurring revenue – without it these businesses would become extinct. And from a corporate-wide perspective recurring revenue, whether MRR or ARR affects the entire organization.
RevOps: Key Players
As discussed earlier, RevOps encompasses nearly all functional groups. However, there are three teams, as well as the leader/CRO that play a pivotal role in ensuring the success of your RevOps strategy.
This person manages the entire revenue process and focuses on how best to monetize the products or services sold. As the bond that holds the teams together, it’s up to this person to ensure that the teams understand the company’s revenue goals and how to achieve them.
Typically one of the first interactions a potential customer has with your organization is driven from marketing. While initial marketing efforts may be impersonal, once the prospect becomes a customer expectations change. Customers expect you to know them and to create personal marketing deliverables. Doing this not only lessens churn, but helps in securing repeat business, which of course means increased revenue.
Focused on closing the deal, sales personnel must proactively think about the customer experience in longer terms than just obtaining a signed contract. By providing prospects with a personal touch, sales sets the foundation for long-term customer satisfaction and higher customer LTV.
Long-term customer success many times relies on the service provided to customers when they have an issue or need assistance. A poor service experience could negate all of the good that marketing and sales accomplished. It’s essential that the service team puts customer experience first to ensure retention and continued revenue growth.
Revenue growth is a primary advantage of adopting a RevOps methodology, and companies that implement RevOps are seeing additional benefits.
Revenue Operations: Benefits Delivered
In addition to being on the receiving end of increased revenue, companies that embrace RevOps benefit from:
- More predictable business growth
- Improved collaboration across disparate teams
- Improved customer satisfaction since expectations are met or exceeded
- According to Boston Consulting Group:
- 10% – 20% increase in sales productivity
- 100% – 200% increase in digital marketing ROI
- 10% increase in lead acceptance
- 15% – 20% increase in internal customer satisfaction
- 30% reduction in GTM expenses
The numbers speak for themselves, RevOps has arrived and it’s here to stay. The question becomes, is your company ready for RevOps?
Is RevOps Right for You?
Perhaps this question should be – how do you know if you need RevOps? It goes without saying that RevOps requires a new way of doing business and will affect nearly all of your functional teams. If you’re unsure if your company is ready for RevOps, the question to ask is if your company goals include transparency and accountability. Let’s take a look at some of the more detailed questions you need to answer:
- Do you want your GTM teams aligned, instead of working independently with their own technology stacks, budgets and resources?
- Would you like data to be connected and priorities aligned across teams?
- Do you want to reduce friction between the teams?
- Would you like to know where revenue leakage is occurring?
- Do you believe that the pricing strategies you have in place are leaving money on the table?
- Do you want to turn customers into brand ambassadors?
If you answered yes to one or more of the above questions, it’s time to start taking the necessary steps to implement a RevOps strategy.
BillingPlatform is an industry leader in ensuring that you achieve the highest revenue possible. With our flexible and scalable cloud-based billing platform, you have the control you need to manage and grow your revenue. To learn even more about what revenue operations is and how it can help your organization, get started with our 5 step journey to achieving agile RevOps today!