Revenue operations meaning
“Revenue operations” is a fairly new term in the business industry, but this business practice isn’t just the latest trend that will quickly disappear. Forrester found that organizations that deployed a RevOps strategy and executed it well grew revenue nearly three times faster than those that didn’t, and public companies with revenue operations also had 71% higher stock performance. These results show that RevOps will be sticking around for the long haul.
Let’s take a look at what revenue operations is and how businesses can put it into practice.
What are revenue operations (RevOps)?
Let’s take a look at the revenue operations meaning and how this practice can improve outcomes for businesses. RevOps involves implementing a team or strategy that prioritizes driving revenue by examining and connecting all the revenue-generating processes. It aims to break down silos between departments to make sure everyone in the business is aligned and on the same page.
What is the role of revenue operations?
So, what does RevOps do? Revenue operations responsibilities include:
Insights and analytics
Revenue operations is responsible for pulling reports and looking at different metrics to determine the health of the revenue or sales pipeline, find where revenue-generating activities can be enhanced, and uncover how the departments can collaborate and complement each other with their processes. Artificial intelligence (AI) software provides the insights and analytics that RevOps teams need to get a complete picture of the revenue pipeline. With Collective[i]’s Predictive PipelinesTM, for example, everyone, across every department, can view what is in the pipeline with AI-enhanced assessments of pipeline health and opportunity odds. This allows RevOps to focus on improving outcomes and driving revenue growth with practices that are more likely to work.
A study by Panopto found that on average, large companies lose $40.6 million each year by failing to share knowledge. RevOps can bring enablement practices — the process of providing teams with the tools they need — and work to remove barriers that prevent internal teams from communicating with each other.
Many businesses stick with what they’ve always done when it comes to processes and procedures. But it’s important to take the time to audit existing processes for efficiency to see if they are the best way to achieve the task. RevOps reviews all functions to analyze if they are working as intended or must be improved or eliminated.
In today’s tech-driven world, finding cutting-edge software and tools that enable revenue growth is vital, and revenue operations can identify them. Platforms such as Collective[i] use AI and deep learning to provide business teams with the best information and data-driven decisions possible. Instead of using an average of six different tools for collaboration, teams can rely on RevOps to consolidate tech and implement tools such as Collective[i]’s Virtual DealRoomsTM , an online meeting space where sellers and other stakeholders — legal, marketing, and operations staff — can access the information they need and communicate with each other.
Learning and development
Another important aspect of RevOps is educating employees and soliciting buy-in for this new approach. If processes change or new technology is adopted, a RevOps team meets with employees, helps them understand the reason behind the change, and gets everyone on the same page.
What is RevOps strategy?
In broad terms, the RevOps strategy is to achieve revenue growth by streamlining processes and aligning teams. It’s that simple. Since companies tend to have several revenue-generating departments — sales, marketing, and customer success — it’s easy for those teams to become siloed and not talk to each other. RevOps strategy aims to break down those walls. To formulate an effective RevOps strategy, companies should start by examining each revenue operation metric to understand the current state of the revenue pipeline. These metrics include:
- Win rate - How many sales opportunities are converted into customers
- Sales cycle time - How long it takes from the first contact to closing the deal with customers
- Customer acquisition costs (CAC) - The total cost of capturing a new customer
- Pipeline velocity - How quickly leads move through the stages of the sales pipeline
- Customer lifetime value (CLV) - The amount of revenue expected from a customer over the entire length of the relationship
- Annual recurring revenue (ARR) - The total yearly revenue that comes from subscriptions or contracts
- Renewals - The percentage of revenue made from customers committing to a new contract or subscription
- Upsells - The percentage of revenue made from selling new products to current customers
- Sales forecasts - The expected revenue for the future and how predictable that revenue is
- Customer churn - The percentage of customers who are lost during specific time periods
Typically, these metrics are generated using internal data. Many tech solutions rely heavily on historical data to generate these key metrics. Yet any useful insights shouldn’t be completely dependent on historical data. After all, past performance does not necessarily give an accurate view of the present or future.
Collective[i]’s approach is based on real-time data that is drawn from a variety of sources — both internal data and external — and the result is insights and actions that help sellers improve their outcomes. This is similar to intelligent applications such as Waze — the AI neural network leverages data, communities, and connections to generate valuable insights and buying experiences. RevOps does important work in overseeing the revenue pipeline, and having the best tools is key to performing RevOps successfully. Contact us today to get started improving your revenue outcomes.Explore Collective[i]