Everything You Need to Know About Revenue Operations

According to Forrester, companies with centralized revenue operations (or RevOps) has gone from 15% to 40% between 2019 and 2021. We’ve also seen the arrival of the Chief Revenue Officer in the C-suite.

Why this sudden shift? A few trends over the past years are converging:

Together, these trends are engendering a culture shift in how business leaders think about profitability. Instead of tracking marketing, sales, and customer success performance separately, there’s a growing drive to manage revenue generation cross-functionally. The goal: to more efficiently and quickly surface, take action on, and close opportunities that emerge across the entire customer journey.

While this makes a lot of sense, it pays to be cautious when jumping onto the bandwagon of something as hyped as revenue operations! Simply hiring a RevOps manager won’t solve all your problems. For RevOps to fulfill its promise, there needs to be a shift in organizational thinking. In this article, we’ll cover some important things to keep in mind.

What is Revenue Operations?

Revenue operations is a corporate function that concerns the cross-functional alignment of sales, marketing, and customer success to meet revenue goals.

Though RevOps is gaining popularity, especially in more progressive organizations, it’s still a relatively new concept. In addition, the role varies from one organization to the next depending on context and needs. As a result, you’re likely to get different definitions depending on who you ask.

Some reduce the role to only Salesforce administration or sales enablement. (This reductive perception can destroy the potential of RevOps.) Others give RevOps the authority to decide on marketing and sales objectives.

Common challenges that can trigger the formation of a RevOps function include (but are not limited to):

• Marketing is nurturing leads, but engaged leads are not being passed to sales in a timely fashion.
• Sales not being alerted when customer success data indicates there’s an upsell opportunity.
• Poor or disjointed customer experience across awareness, conversion, and retention.
• Lack of insight into which marketing initiatives actually drive revenue (not just leads).
• A messy database with duplicate entries making it impossible to have a single source of truth.

RevOps is all about aligning processes, tech, and people across functions. When done right, it not only helps to meet revenue goals, it can accelerate the entire revenue cycle.

Why is Revenue Operations Important?

RevOps is important because it examines revenue generation from a holistic perspective.

Without a holistic perspective on revenue, department-specific KPIs can create the illusion that the business is doing well, when in reality, things aren’t adding up.

For example, marketing could hit numbers, but be sending leads that are not a fit for sales. Sales could be closing a bunch of leads, only for customer success to experience high churn.

RevOp’s work helps to fix the poor customer journey experience that results from mismatched expectations and disjointed communications between potential customers and your company. And as we all know, putting the customer first is key to success.

What Does A Revenue Operations Manager Do?

The role of a revenue operations manager is to improve the customer experience across multiple functions with the end goal of accelerating and driving revenue. To do that, they must understand the current customer journey across marketing, sales, CS, identify gaps, develop solutions, and implement them.

Usually this involves starting with existing processes to find improvements. And depending on what that initial analysis uncovers, responsibilities can include:

• Procuring and maintaining martech and salestech
• Building new systems and automation for lead routing
• Running analytics on cross-departmental revenue generation
• Surfacing points of friction in the customer journey
• Creating documentation and training teams on new process

Keep in mind, however, that the day-to-day of a RevOps manager can vary depending on the level of operational maturity your organization has.

What’s the difference between RevOps and MOPs?

A formal definition of RevOps places MOPs under its umbrella, simply because MOPs focuses on marketing whereas RevOps works across sales, marketing, and customer success. In practice, however, the RevOps movement is still young. Marketing operations has had more time to mature and grow inside organizations.

MOPs was a much more commonly searched term, though more recently RevOps is beginning to catch up. The recent growth in interest in RevOps is likely tied to the trajectory of technology.

MOPs developed to help better leverage the growing suite of martech tools. For a while the industry-wide focus was on adopting and optimizing the use of these tools (many companies are still working on digital transformation).

But it’s only recently that companies are beginning to think about tech stack integration. And along with this new need comes a change in how we think about the siloed functions of marketing, sales, and customer success.

Presently, MOPs is not always folded under the RevOps function. In practice, RevOps work is done by MOPs professionals that are already in place within organizations. After all, the MOPs skill set is ideally suited for RevOps work. Furthermore, RevOps and MOPs often report to different leaders.

Perhaps the landscape will one day evolve towards a genuinely all-encompassing RevOps function, but for now the lines are still quite blurred between MOPs and RevOps.

The Top 5 Things that RevOps Can Help You Justify

RevOps are key to making a strong case to your manager for certain types of investments. There’s nothing like a clear analysis of bottom line impact to persuade leadership of long overdue changes. Here are 5 things that RevOps can help you justify.

1. Hiring: Think a new MOPs team member could increase productivity? RevOps can help you calculate their impact and how it could pay off over and above the costs of hiring.
2. Campaign Budget: Without numbers to back it up, asking for more budget to run a campaign can be tough. Intelligence around which campaigns have worked and which haven’t and explaining to leadership that you want to double down on something proven is a different story.
3. Tech Procurement: Most major platforms will take up tens of thousands of dollars in your budget. That makes it harder to ask for additional tools to support your central stack, even though they help to get more out of them. RevOps can help calculate the bottom line impact of efficiency gains.
4. Tech Stack Integration: Of course, buying new tech creates new challenges, it’s no wonder more and more teams are beginning to prioritize integration. But doing it right requires pulling team resources away from shorter term initiatives. RevOps can help explain the value it would bring from a dollars and cents perspective.
5. Customer Experience Advocacy: Does management ever insist on buying lists or email blasts? RevOps can help you show how those initiatives are great for vanity metrics, but not contributing as much to the bottom line.

How to Build a Revenue Operations Strategy

A revenue operations strategy will be very specific to your organization’s particular resources and challenges. There’s no one-size-fits-all. But there are a few phases of building a RevOps strategy that everyone should follow in order to cover all your bases.

Step 1: Research & Discovery

Clarify your understanding of the following things:

• Current business challenges
• Outcomes that leadership want to see
• Buyer personas and what their pain points are at each phase of the buyer journey
• Length and phases of the sales cycle
• Marketing process for generating, nurturing, and routing leads
• Customer success churn causes and retention challenges
• Audit the tools in the tech stack and what role they play in the customer journey

Step 2: Identify Gaps

Draw a workflow diagram delineating the tools, team members, and processes that play a role in the buyer journey. Look for inefficiencies and opportunities in the process. It could be technical things like leads being dropped at a certain stage or sales missing information about actions taken by leads. But you may also notice more general issues such as a mismatch in the customer experience before and after closing.

At this stage, it’s also a good idea to check in with stakeholders once again to see if they can add any nuance to what you’ve discovered so far. This helps to ensure that the workflow diagram and the gaps identified are complete and accurate.

Step 3: Prioritize

Once you’ve surfaced what’s working and what isn’t, it’s time to prioritize. If you want to get really advanced, you can even build a framework for prioritization that enshrines these principles. There are two key things to keep in mind when you do this:

• Level of effort needed for the change vs. return on investment
• Mixing up short term and long term initiatives (short term initiatives help build momentum and confidence, whereas some long term initiatives are critical, but need to be actively prioritized).