Over the years, businesses have evolved in ways we probably didn’t even think were possible. From implementing agile techniques to moving away from traditional hierarchies. But, if there’s one thing that remains unchanged, it’s growing your revenue to scale a business.
Revenue growth has always been one of the main aims of a business - whether big or small. So, it’s natural that a concept such as revenue operations or RevOps came into existence.
RevOps aims to maximize revenue by aligning revenue-generating departments together to achieve maximum revenue. According to Forrester, companies that had implemented RevOps grew 3 times faster than those that didn’t.
But, these are companies that effectively defined, implemented, optimized, and managed revenue operations.
A study conducted by HBR suggests that many executives believe they know what RevOps is but fail to define it as a holistic approach to revenue maximization. As a result, many companies who implement revenue operations without a proper understanding of what it is often experience a negative impact on their business.
In this article, we’ll discuss in detail what revenue operations are, its importance, and how to successfully implement it in your business.
What is Revenue Operations?
Revenue operations (RevOps) refers to the process of breaking down barriers between departments and aligning sales, marketing, and customer success departments together to be held accountable for revenue generation and drive growth to a business.
It encourages departmental collaboration by bringing the departments responsible for revenue generation together and aiming for a shared goal of revenue growth.
What’s the Difference Between Revenue Operations and Sales Operations?
The main difference between sales operations and revenue operations is that Sales Ops only oversees sales-related activities such as revenue generation, deal management, and optimizing the sales process to increase sales.
RevOps, on the other hand, manages all the departments that are responsible for revenue generation and aligns them together to maximize revenue. Revenue operations don’t only manage the Sales Ops, but also oversee marketing and customer success operations.
It focuses on the entirety of the customer journey, go-to-marketing strategy, optimizing revenue funnels, and enhancing the customer experience.
What Departments are Involved in Revenue Operations
Revenue operations aim to bring together all the revenue-generating departments together and align them towards the single goal of growing revenue.
Sales Operations
Sales operations or SalesOps are responsible for all sales-rep-related activities. It mostly deals with sales forecasting, CRM, training and development, and closing deals.
In a revenue operations framework, a sales operation manager is employed to oversee sales operations.
Marketing Team
Marketing plays a key role in RevOps as it aligns with sales to maximize revenue. The marketing team is responsible for defining and maintaining the brand, running marketing campaigns, producing marketing material, and promoting business offers.
In a revenue operations framework, marketing and sales efforts are related and the marketing department is overseen by a marketing operations manager.
Customer Success
The customer success department mostly deals with end-users to help customers transition to their products as smoothly as possible. It is responsible for customer support, managing onboarding, customer churn, and ensuring customer success.
Under revenue operations, a customer success manager is employed to oversee the customer success teams.
Why Businesses Need Revenue Operations Models
Encourages Cross-functional Collaboration
RevOps breaks down the barriers between departments and encourages cross-functional collaboration. Under RevOps, all departments work together towards a single goal that streamlines revenue growth and encourages a healthier, collaborative work culture.
Better Transparency Between Departments
By aligning sales, marketing, and customer success teams there is better visibility of each department and how their respective goals contribute to the larger business objectives. Increased transparency between departments enables everyone to work together as one team rather than clashing with each other.
For example, marketing may be responsible for lead generation, but if those leads aren’t turning into sales, they won’t improve the business. This can lead to problems within departments and decrease sales and marketing effectiveness.
On one hand, it looks like the marketing department is successfully achieving all its set targets but due to the lack of communication with the sales team, they are failing to convert leads into customers.
RevOps aims to minimize these clashes by encouraging transparency between departments and communicating better to be on the same page and see how each of their activities aligns with the larger business goals.
Helps to Predict Business Growth
Being able to accurately predict business growth is a valuable skill. Companies use revenue prediction techniques like sales forecasting to plan an optimized strategy for growing revenue.
This helps businesses set targets, develop goals, and create strategies to streamline revenue operations. Businesses can then use revenue operations metrics like customer acquisition costs and customer lifetime value to measure the revenue operations teams’ performance to refine their predictions for the next month, quarter, or year.
Improves Problem-Solving Ability
If each department can make smart decisions in their relative field, what would happen if they came together to achieve a shared goal?
Combining all your revenue-generating departments can open up newer ways to approach a problem, explore different perspectives, and share innovative ideas to streamline problem-solving.
Better problem-solving is at the forefront of every successful business. It’s what leads businesses to discover innovative solutions to common customer problems and gain a competitive advantage over the market.
How to Get Started with Revenue Operations for Your Business
Identify Your Business Goals
Before implementing revenue operations for your organization, it’s important to identify why you need to shift to the revenue operations model in the first place.
Different businesses have different needs. You would need to sit down with stakeholders to decide why you want to implement revenue operations and what benefit you seek from it.
Do you want to increase cross-functional collaboration? Are you failing to hit your revenue goals? Is your process contributing to an unstable or unpredictable cash flow? Etc.
Identify what issues you wish to solve with revenue operations and then move on to the next step.
Gather Data
Now that you have a rough idea of what you want, you need to collect data by performing an audit of your existing operations.
A complete audit for RevOps would usually require you to perform the following:
- Audit your existing product offerings and processes and see how they align with the customer journey. Create a list of gaps that might occur due to inefficiencies.
- Audit your current technology and see whether it’s properly tracking customer behavior
- Audit your tech stack to identify any inefficiencies in the software
- Audit any other digital mediums you have in place to see if you’re following best practices
After gathering all your business’s vital data, it’s time to bring every revenue-generating department together.
Bring All Your Systems Together
After identifying gaps in your current framework, you need to devise a revenue operations strategy to bring all your systems together so that sales, marketing, and customer success teams can seamlessly work together.
Create a Revenue Operations Team Structure
Firstly, you need to make changes to the structure of your organization. A revenue operations structure differs from a traditional hierarchical structure as there are additional roles that oversee operations for their respective departments.
You’ll need to assign roles to your team members and clearly define each person’s responsibilities and goals.
In a RevOps structure, the chief revenue officer (CRO) is the top manager and under them come different operations managers including marketing, sales, and customer success operations managers.
Although you’d reassign your existing employees' suitable roles to fit within the RevOps structure, it’s important to ensure you don’t have any functional gaps. To fill those gaps you would need to hire additional specialists.
Make a Go-to-Market strategy
After defining key roles in your RevOps structure, you need to gain a thorough understanding of your customer journey. Knowing the customer journey will help you identify optimization opportunities to improve the customer experience.
You can do this by:
- Creating customer personas of what your ideal customers would look like
- Identifying their needs and how your company can help meet them
- Identifying the tools and processes that connect the customer journey
- Looking for potential bottlenecks in the process and planning workarounds
- Updating the customer journey by regularly reviewing it after some time
After getting an idea of your ideal target audience and how to sell your products to them in the most efficient way, you need to develop your go-to-market strategy.
A go-to-market (GTM) strategy is an action plan that details how to interact with customers to sell them your products in the most effective way and gain a competitive edge.
When developing your GTM strategy, you would have to bring together different departments by encouraging cross-functional collaboration to devise the best strategies and product offerings to engage customers.
Establish and Optimize Cross-Functional Communication
A GTM strategy will guide most of the revenue operations teams’ actions. However, departments would also need to agree on a data-driven strategy and governance to work together and establish which departments are related.
The main purpose of governance is to help set up proper communication channels. Managers and employees from related departments should meet regularly and share feedback to improve RevOps.
Incorporate Automation
To achieve success with your revenue operations strategy you need to have specialized technology in place. Through modern technologies, AI, and software, it’s possible to automate and enhance processes, increasing the RevOps team’s productivity.
Although investing in some technology can be beneficial, there are a few softwares that are necessary for implementing revenue operations effectively.
These would typically include CRM software, centralized analytics and reporting tools, order management, marketing automation, data integration tools, sales enablement, and customer support tools.
Larger organizations and established enterprises may adopt even more advanced technology for their business. This could include conversational intelligence, sales intelligence, and revenue operations platforms, to streamline their revenue generation.
It’s vital to invest in the above technology as RevOps is a data-driven strategy. Without efficient data collection and reporting, your revenue operations strategy is likely to fail.
Optimize RevOps Strategy
After creating and implementing your RevOps strategy for the first time, you’re bound to face some obstacles and a few setbacks.
At this stage, you would conduct regular RevOps meetings to identify challenges and flaws in the RevOps structure and strategy.
One way to check for these flaws is to use a revenue operations platform that clearly outlines the biggest hurdles RevOps teams face each month. After identifying these, you would need to sit down with the RevOps team and develop an actionable plan to get rid of the bottlenecks hindering revenue growth.
This would ensure that collaboration between departments is maintained, remains effective, and achieves set revenue targets.
These meetings would also help decide the way forward. As sales, marketing, and customer success teams come together their collaboration would evolve, empowering them to set newer goals and targets for themselves.
This is an opportunity to develop a 12-month action plan that incorporates feedback from each department and stakeholder that helps optimize and maintain the efficiency of the RevOps strategy.
Challenges of Implementing Revenue Operations
At first, revenue operations may not seem too different from sales operations, but bringing together sales, marketing, and customer success teams and making sure they all collaborate effectively is no easy task.
When implementing a data-driven RevOps strategy in your organization you’re bound to fall into some inevitable challenges.
Resistance from Executives
Top-level executives and functional leaders may be hesitant to shift to a RevOps structure. Managers who equate their value in an organization with their seniority in a relative department may be threatened by the new change of management.
This is because a RevOps structure has a chief revenue officer who supervises the other operations managers. Top-level execs may perceive this as a risk of “reducing their value” in the organization, which is why they may show resistance to switching to a RevOps structure.
Lack of Departmental Alignment
Sales, marketing, and customer success teams often have different strengths, tactics, and goals, which means aligning them together toward a shared goal of revenue maximization might be difficult.
This is a common obstacle faced by most organizations as they fear departments won’t collaborate effectively. However, this can be tackled by informing the departments of how they’re related to the end goal (revenue maximization) and conducting regular meetings for them to engage with each other more often can promote an overall collaborative work culture.
Uncertainty of Business Operations
Stakeholders may not be entirely thrilled with the transition to a RevOps framework. They may fear the uncertainty of revenue operations being implemented into the organization as it can be difficult to gauge the value RevOps would bring to the company.
Senior executives are often not informed about the organizational backbone. You can convince top-level execs to implement RevOps by citing real-life case studies of organizations in your industry that managed to achieve success with RevOps. It’s also beneficial to look into your company data and explain why you think revenue operations can help improve your bottom line.
How Web Canopy Studio Can Help Scale Your Revenue Operations
Revenue operations extend beyond restructuring your organizational culture and cross-functional collaboration between departments. It’s all about increasing your revenue, but you can’t guarantee more money if you aren’t able to convert your customers in the first place.
With WebCanopy’s professional services, you can be sure to maximize your conversion rate, thanks to our team of expert developers and advanced marketing technologies such as Sales Enablement.
Through our services, you can skip the guesswork and all the overwhelming challenges that come with developing a RevOps strategy. We use HubSpot - the market-leading CRM software - to help you manage all your data in one centralized place.
Being part of HubSpot’s Diamond-Certified Solutions Partner Program, we practice what we preach. We’ve empowered multiple businesses to scale their revenue operations and hit their targets consistently.
Interested to learn more? Book a call with us today and see how we can help you!
