Revenue operations, or RevOps for short, is transforming the way software as a service (SaaS) companies conduct business. Defined as a methodology to improve efficiency, provide for more predictable revenue, and enhance the customer experience, it aligns marketing, sales, and customer success. What’s behind the meteoric rise of revenue operations for SaaS companies? Before we answer that question, it needs to be said that RevOps isn’t a new phenomenon. It’s always existed in one form or another – just without a title.
Why RevOps, Why Now?
The rise in RevOps can be attributed to four distinct reasons:
- Revenue data disconnects across the organization, resulting in inefficiencies and inaccuracies
- Technology innovation such as artificial intelligence (AI) that provides the ability to deliver greater insights
- Changing customer expectations that require a seamless experience across the entire customer journey
- The need for increased accountability and transparency throughout the entire organization in order to achieve strategic goals
At the core of the RevOps evolution is a shift in how SaaS companies are thinking about their revenue processes. While important for all business models, SaaS businesses are unique in that sales aren’t a one-and-done initiative. To stay profitable, they rely on the recurring revenue provided by their subscribers, which means that delivering an exceptional customer experience across the entire customer lifecycle is imperative.
When customer churn occurs, many SaaS companies find themselves in a situation where revenue from net new customers isn’t enough to offset the loss. This is where revenue operations for SaaS is making a significant difference in maximizing the revenue potential by enabling the RevOps teams to boost customer retention rates.
While every business unit is important to your success, there are three departments that are critical to your profitability – marketing, sales, and customer success. For SaaS businesses that continue to operate using status quo tech stacks, systems, and processes, these teams typically work on their own (and many times) conflicting achievement goals. RevOps breaks down the silos, enabling these departments to work in tandem, rather than as separate business units. Integrating the teams provides visibility and accountability by giving these resources shared responsibility for revenue growth.
When SaaS Revenue Operations isn’t Part of Your Strategy…
When RevOps isn’t part of the equation, your go-to-market teams rely on disparate tech stacks, systems, and processes. This can include customer relationship management (CRM), spreadsheets, marketing automation, and business intelligence, resulting in inconsistent data and the inability to make decisions based on accurate and consistent insights. Let’s take a closer look at the disconnects between these business units.
On the frontlines to fill the sales funnel with qualified leads, marketing typically uses an array of initiatives such as events, webinars, multi-touch campaigns, content downloads, etc. with each activity having its own goal. Once the lead reaches a certain threshold, it’s typically heads over to sales to complete the process and close the deal. There are a couple of scenarios that can happen at this stage 1) the leads received by sales aren’t qualified, 2) sales doesn’t work the leads provided. Either way, there’s a disconnect in the process and potential revenue is left on the table. In most SaaS companies, the customer success team picks up the process once the prospect becomes a customer. Responsible for customer retention, many times this team is missing the vital information needed to deliver the type of customer experiences that improves renewal and upsell rates.
While these three departments are fundamental to revenue operations for SaaS companies, there is another that is of equal importance – finance. While not always included in RevOps descriptions, your finance teams are a critical component of your growth and profitability.
Why Include Finance in RevOps?
Typically thought of as the business unit that sends invoices and collects revenue, your finance teams are critical for revenue growth. If you’re like many of your SaaS counterparts, your revenue stack consists of a hodge-podge of mismatched technology or point solutions. As one of the three RevOps pillars, your platform/data is critical to the success of your RevOps strategy, and nowhere is providing a single view of the truth more important than your revenue technology stack. According to market research firm IDC, companies lose between 20 – 30% of their revenue every year due to inefficiencies. If you could reduce or eliminate revenue loss, wouldn’t you?
RevOps connects and aligns your revenue data and technology to give RevOps teams across the entire organization the most accurate and current information available. Regardless of the number of revenue technology solutions or applications you’re currently using, they need to act as a single entity that consists of four interconnecting layers to deliver a single source of the truth.
Subscription management
With a business model that relies on your ability to quickly set up and change subscription pricing and rating models, plus develop innovative packages and bundles, it’s imperative that you’re able to maximize the efficiencies that revenue operations for SaaS delivers.
Billing management
Support any business or pricing model by automating your billing processes to maximize recurring revenue and improve the customer experience.
Payment management
Expedite payment processing by automating credit card and ACH payments with SOC and PCI compliant payment gateways. When payments are delayed, increase payment success and decrease involuntary churn with intelligent payment retry and sync with dunning to keep customers apprised of their current outstanding balances.
RevOps
As the overarching layer, RevOps helps to minimize outstanding receivables, identify and remove revenue leaks, and ensure accurate revenue recognition.
It goes without saying that revenue operations and SaaS are like a hand and glove. The methodologies inherent to RevOps enables you to improve your quote-to-cash (Q2C) processes by removing the complexities and manual efforts that lead to errors, bottlenecks, and reduced profitability.
Revenue Operations Puts SaaS Businesses on the Fast Track to Profitability
Essentially, the RevOps approach provides the framework for your RevOps teams to set up processes, create the best technology stack, and drive insights. By breaking down the silos, your RevOps teams – marketing, sales, customer success, and finance – that are currently working disparately, come together to reach common goals. Increase revenue, generate profitability and deliver exceptional customer experiences.
As more SaaS businesses move from a ‘what we sell’ to ‘how we sell’ business philosophy, they’ll need the right billing technology. One that eliminates the assortment of systems and point solutions and enables them to unite their processes, platform/data, and people. As the industry-leading cloud-based billing solution, BillingPlatform provides SaaS companies something other billing solutions struggle to provide. If you want the foundation to develop revenue-generating processes, to realize a single source of the truth, and boost cross-organizational collaboration, reach out to our experts today.
