What is Revenue Operations?

They say all roads lead to Rome.

If you imagine Rome as revenue, then the role of revenue operations is to make sure that those roads are built in the most efficient way and that they are effectively signposted.

Revenue operations, or “rev ops” in it’s shortened form, is the strategic alignment of sales, marketing, finance, and service departments to optimize revenue across the customer’s lifecycle.

It’s where the science of sales analytics and the art of customer engagement are wrapped into a process to systematically improve how businesses generate revenue.

At the heart of rev ops is the customer, their experience, and the revenue this partnership generates. 

• Where do we engage with customers? 
• What are the outcomes of these engagements? 
• And, how can we systematically scale a better operation for the customer across them?

To explain the role of revenue operations, it’s often a good idea to start by clarifying its position against the role of sales operations, with which it is sometimes wrongly used interchangeably.

What is sales operations?

Essentially, it’s the role of looking at how your business sells and improving that process. 

Its function is to reduce the friction across your sales stages, enable your salespeople to do better, and review the role of tech, process, and workflows that surround these.

You could say that anything that falls under the flag of helping sales to achieve growth sits under the remit of sales operations.

It’s often likened to the role of the cox in rowing and how they steer the course of the boat and the rhythm of the rowers. 

Without a coxswain, even the most gifted rowers won’t move across the water as quickly, powerfully, or efficiently as they could. 

Those in sales ops do this for sales teams and are there to constantly ask “what will make the boat go faster?”, and then document that system of improvement.

Sales operations codify a system-to-sell so that businesses can measure, revise, and scale a repeatable structure to improve sales efficiency. The responsibilities typically include:

1. Cross-functional collaboration
2. Technology management
3. Team structuring
4. Sales data management
5. Sales forecasting
6. Performance management
7. Training

What is the difference between sales and revenue operations?

It’s more than a new name, or replacing the use of sales with revenue. it reflects a new buyer journey and the importance of their ongoing experience across the full customer lifecycle.

The fundamental difference with rev ops is that it extends to include marketing, finance, and customer service operations under the same umbrella and holds them all accountable to revenue. 

Sales ops takes ownership for the efficiencies, processes, and sales ecosystem. Revenue ops takes cross-departmental ownership for the entire go-to-market operation.

The task of rev ops is to remove the friction points across these departments and align their processes. That could extend to include your product operations, depending on the nature of your service or solutions.

Many see it as a natural evolution for those working in sales operations and a more holistic approach to revenue drivers. A case of widening the system-of-selling to encompass every decision, or customer touchpoint, across marketing and customer service departments. 

• What are the indicators, influencers, buyer considerations, and connection points across this journey that impact revenue? 

When a boxer throws a punch, they don’t look solely at the point of impact to improve it. 

They consider the journey from the shoulder, the hips, the positioning of the knees and the leverage they can take from their toes. There’s a science to boxing and there’s a science to revenue.

If we’re playing with analogies, then revenue ops could be better described as the shepherds that look after the flock. 

A shepherd is responsible for using multiple sheepdogs to herd sheep.

They use their vantage point and visibility across the land to strategically communicate to separate sheepdogs the direction they need to take to work as one.

If sheepdogs don’t work collectively the flock don’t stay on course, and the same can be said for customers that have disjointed experiences across their lifecycle.

Customers have changed the way they buy and the emergence of revenue operations as a department is a response to:

• An increased focus on the lifetime value of a customer 
• A rise in subscription models, upselling, and cross-selling
• A sale cycle that’s increasingly non-linear 
• Buyers that are more informed than ever 
• A growing tech ecosystem
• Customers that engage with businesses through multiple channels, people, and timelines.

Exact figures might vary, but reports generally agree that between 57% and 75% of the buyer journey is completed before prospects ever engage with a sales rep. 

This, coupled with the rise of subscription models reliance on upselling, cross-selling, and retention, have created a paradigm shift.

What is the role and responsibility of revenue operations?

Rev ops are there to understand the bigger picture, bridge the silos that hamper revenue, and drive accountability, process, and efficiency across that journey.

The role can be broken down into four areas of ownership:

Operations management

Creating an operational and tactical blueprint across sales, marketing, and customer success for achieving strategic business objectives. 

Roles:

• Sales ops 
• Marketing ops
• Customer ops
• Project management
• Product ops

Responsibilities

• New business processes
• Strategy
• Project & change management
• Cross-functional collaboration
• Sales planning and compensation

Revenue enablement

Connecting a seamless and accountable process that removes the points of friction across sales, customer success, and marketing.

Roles:

• Sales enablement
• Learning management
• Performance management

Responsibilities:

• Onboarding
• Sales efficiency
• Coaching
• Continuous learning
• Knowledge sharing

Revenue insights

Providing a holistic, real-time, vantagepoint of clean data across these departments. Surfacing their inputs, and proactively packaging actionable insights that allow them to pull the levers on revenue.

Roles:

• Business analyst
• Data scientist
• Database developer

Responsibilities:

• Data hygiene and management
• Data visibility and access
• Operational insights
• Strategic direction

Revenue tech stack

Ownership of the tools and technology ecosystem that can optimize efficiency, process, and improvement across these departments.

Roles:

• Software developer
• Systems administrator

Responsibilities:

• Ownership and procurement of the tech ecosystem
• Integration and adoption of tech
• System administration

The purpose of rev ops is to manage these four pillars, drive harmony across the revenue-facing teams and deliver an ever-improving customer experience. 

A good revenue operation department seeks to:

1. Bring cross-department visibility that creates a better understanding of the customer, your engagement with them, and their relationship with revenue. 
2. To create a system that shows predictable revenue growth. 
3. Increase communication among these departments and empower them to create a better experience for the customer.
4. Detangle the process knots and create a system of improvement.

Sales, marketing, and customer service within revenue operations

They are still different departments with different goals, they are just accountable and aligned against a wider revenue objective.

In today’s world it is easier, faster, and cheaper to replicate features, functionality, and offerings. The one thing that remains defiantly unique for businesses is the experience they create.

With this in mind, it’s incredibly important for departments to work closer across the customer cycle in order to create a seamless experience.  

Marketing is present from awareness to expansion. Playing a hand in the first experience a customer has and being directly involved in structuring cross-sells, upsells, and advocacy sales.

The rise of social sales and its relationship with personal branding means that sales members now enter the lifecycle at an earlier stage.

They’re ability to influence buyer awareness, consideration, and decisions starts long before they pick the phone up. Sales teams are the advocates, conversation starters, and community flag bearers.

With a shift towards inside-out growth, businesses are looking at how they’re existing customers can shape their sales and marketing experiences. As the department that’s closest to the customer’s needs, the role of customer services has become about growing new customers equally as much as it is about holding onto the ones you already have.

Each department still has their own set of metrics and targets respectively, but how you structure them  has to accommodate the fact that there’s no internal finishing line to customer experience.

When do I need revenue operations?

Every business needs to be considering a cross-department strategy that puts the customer’s experience at the centre of that journey.

However, appointing a dedicated resource to managing that will likely depend on the maturity of your company, the size of your operation, and the aspirations of your revenue.

Introducing rev ops usually means you want to scale a cross-department strategy, or that you know there are leakage points across the business lifecycle that need mending. 

Here are a few questions that will help you decide whether you need a dedicated resource:

1. Are there too many tools and too little process?
2. Is there a lack of clarity and documentation on your operation? 
3. Can you explain your customer lifecycle from an unqualified lead to a customer upsell?
4. Can you explain how or why things are happening (churn rates, sales velocity, marketing ROI, or lifetime value)? 
5. Why do you want to know?
6. Does the data exist and do you trust what it says?

Sitting a couple of degrees behind the front line, rev ops provides a vantage point over departments based on the data that they’re fed.

Ultimately, the goal is to provide predictable business growth, understand the levers in the process and anticipate changes with enough time to act accordingly. 

What does the revenue operations org structure look like?

The impact of COVID-19 on revenue operations

Whether it’s COVID-19, another pandemic, or any paradigm shift, it’s important that you pause, survey the landscape, and reset your assumptions.

In revenue operations, this starts with forecasting. 

Businesses should be stripping back their operation and separating the vital from the non-vital, shortening the measurement runway and reviewing how the metrics now move. 

New revenue has stalled, customer payments may be late, and sale stages do not progress as they did historically. 

It’s time to revisit which indicators you need to measure and how your outcomes have changed. 

By simplifying everything down you can start to rebuild your operation in this new landscape. Here are a handful of action points for rev ops to install:

• Tighten your feedback loops 
• Operate with complete transparency 
• Increase remote visibility 
• Build a lighter vehicle to carry you through to a point where you can start scaling again.
• Segment your customer base in terms of risk and opportunity
• Revisit commercial structures
• Reconsider situational value propositions

We’ve gone into more detail on the metrics, tech stack, and challenges facing revenue operations in our recent handbook.

Collected from the first 100 episodes of our Sales Ops Demystified podcast – we aim to share the insights of those charting the new department.

If you’re working in revenue operations, then we’d like to invite you to join the exclusive content community we’re building for the space here.