Revenue operations strategy

Research shows that 79% of sales organizations miss their forecasts by more than 10%. Implementing a RevOps strategy with data as its foundation transforms forecasting into an insights machine. Learn the basics of developing a RevOps strategy for predictable revenue growth below.

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Revenue operations strategy

Revenue operations, or RevOps, describes both a department and a framework for better understanding and aligning revenue-generating teams within an organization.

By implementing RevOps strategies with data as their foundation, marketing, sales, and customer experience teams can operate efficiently — and put a scalable revenue framework in place for predictable growth across the customer lifecycle.

Benefits of RevOps

It’s not always going to be easy getting an organization’s revenue-generating teams fully aligned. Too often, departmental teams operate in silos, relying on their own defined processes to achieve their own defined measures of success.

While it can be difficult to unite these departments, doing so leads to operational efficiency, improves the buyer experience, and drives revenue growth.

This article will cover outline four phases of creating and implementing a revenue operations strategy:

  • Phase 1: Assessing the current state of revenue operations
  • Phase 2: Creating a revenue operations framework
  • Phase 3: Sales planning and forecasting
  • Phase 4: Implementation

Phase 1: Assessing the current state of revenue operations

An effective RevOps approach requires a complete understanding of operations as they relate to revenue growth. RevOps should take a deep dive into the data produced by each revenue-impacting team and analyze it to understand which processes are functioning well and which need to be improved, eliminated, or added. With that foundation of insights built on concrete historical data, RevOps can make better decisions and effect greater — and more revenue-generating — change. Some key revenue operations metrics to consider are below.

Revenue operations metrics

Customer churn

When customers leave, so does the revenue. Customer churn measures the percentage of customers that discontinue their relationship with your product or brand. The more that can be learned about what is causing customer churn, the better an organization can prevent or reduce it.

Cost of customer acquisition

It’s not always easy to keep new customers coming through the door, which underscores the importance of customer retention. The total cost for customer acquisition may include advertising costs, the cost of the marketing and sales teams, production and publishing costs, and more. Understanding the full scope of customer acquisition costs helps put metrics such as customer churn in perspective.

Pipeline velocity

The quicker deals move through the pipeline, the greater the profit. Pipeline velocity is defined as the rate at which leads move through the sales pipeline. Many organizations find that a structured sales process helps to increase overall pipeline velocity as well as the quality of leads generated. That being said, pipeline performance can be complex, and the velocity depends not just on the sales team but also on the marketing and customer success teams — which is why they should be involved in the planning and execution of RevOps strategy.

Sales forecasting

Effective sales forecasting practices generate revenue predictions that help a company stay on track and make more informed decisions to drive predictable revenue growth. Sales forecasting requires a balance between historical and opinion-based data, qualitative and quantitative data, and leading and lagging indicators in order to be as accurate as possible. Collective[i]’s Intelligent ForecastTM delivers a daily automated, adaptive forecast — updates, recommendations, and risk alerts — so an organization can act swiftly and change outcomes for the better.

Renewals, upgrades, and cross-sells

The importance of customer retention can’t be overstated, especially considering the cost of customer acquisition. Renewals, upgrades, and cross-sells all increase revenue growth but don’t require as many company resources as new customer sales.

A revenue operations strategy will only be as effective as it is data-based. The more grounded in data your RevOps strategy is, the easier it becomes not only to justify and generate buy-in from all teams but also to gauge progress, modify objectives and targets, and otherwise monitor and adapt processes as needed.

Phase 2: Creating a revenue operations framework

The next phase of RevOps strategy involves planning a framework and team structure.

A typical revenue operations framework encompasses four responsibilities: operations, enablement, insights, and tools. RevOps impacts virtually all customer-facing business units, so creating strategies and objectives that unite and align these revenue operations responsibilities (and the individuals or teams that impact them most) is a prime objective for RevOps strategy.

The design of a revenue operations team structure should be based on the prioritized needs of the company as well as its budget. Positions should be created and filled to address the pipeline’s current state. Try to identify the biggest gaps in the revenue operations pipeline first, and then pinpoint the right hire or hires who can make the biggest impact.

Details matter, so once the general framework and team structure have been sketched out, be as specific as possible when creating revenue operations job titles or a revenue operations job description.

Depending on company size and maturity, there are two approaches to consider when building a revenue operations team:

  • For companies with limited resources (or those that aren’t ready to fully commit to RevOps), it may make sense to assign specialized roles to individuals within different departments. This can provide a quick start to implementing a revenue operations strategy.
  • Other companies may find more success with a dedicated RevOps team or department. This could mean reassigning individuals from other teams to create the new department or hiring new team members based on specific RevOps role needs.

Phase 3: Sales planning and forecasting

Sales planning and sales forecasting are two of the most vital functions of revenue operations.

Sales planning

Sales planning consists of five steps, each of which presents unique opportunities to improve the processes and outcomes of specific sales activities.

The five steps to creating a sales plan are:

Step 1. Assess the current state of sales. Think about sales numbers, lead-generation metrics, and pipeline health and performance. A well-rounded sales analysis will include both quantitative sales activities (e.g., time spent per lead, close rate, etc.) and qualitative activities (e.g., contacting new prospects, brand awareness, etc.).

Step 2. Define the objective(s) for the sales plan. Sales objectives need to be specific and measurable. While a sales plan can certainly accomplish many different objectives, narrowing the focus to just a few core objectives will help focus the sales planning process and make success easier to gauge.

In addition to nailing down performance objectives (e.g., qualifying 25% more leads), think about concrete strategy objectives (e.g., modernizing the sales process with the integration of artificial intelligence, or AI). A sophisticated RevOps platform like Collective[i] can help teams meet those objectives. Intelligent InsightsTM is capable of providing sales reps with automated, optimized to-do lists so they can focus their efforts on the most impactful activities.

Step 3. Determine the obstacles to success — and how to overcome them. This step is all about understanding the sales reps’ experience and identifying where in the sales process they encounter the most difficulty in advancing a prospective deal to the next stage. When possible, dive deep to uncover the root problems causing the difficulty. Some problems will require cross-departmental collaboration to address, while others may be solved by hiring new employees or rethinking the tech stack.

Step 4. Identify existing strengths and assets. Just as it identifies obstacles and how to overcome them, RevOps should also pay attention to what’s working — and why. Building a RevOps team and engaging it in activities like sales planning and forecasting does not mean reinventing operations from the ground up. Rather, building off of present strengths provides a great foundation, celebrates teams’ successes and increases buy-in, and gives teams the opportunity to appreciate — and effectively position — organizational differentiators.

Step 5. Optimize the sales process by removing friction points. This is where forward-thinking RevOps teams can excel by finding the right technological tools to imbue the sales process with relevant data at every stage. For example, Collective[i]’s RevOps platform includes Intelligent WriteBackTM, which automates data capture to save time and eliminate human error, and C[i] RecommendsTM, which analyzes top performers to identify the most impactful selling activities at each stage of the pipeline.

Sales forecasting

The other major piece of RevOps strategy is sales forecasting. Successful forecasting relies on precise, accurate data — something revenue operations software platforms are designed to deliver.

While lagging indicators (e.g., number of closed-won opportunities) are helpful for making general sense of the historical pipeline performance, leading indicators are vital to accuracy in sales forecasting. This is because leading indicators, based on past and current data, provide insight into future performance and outcomes. Because RevOps deals in advanced data analysis and strategic thinking, choosing the right technology is just as important as choosing and hiring the right team members.

AI-enabled forecasting removes human error and bias from forecasting models, leading to more predictable and repeatable revenue growth strategies. Additional benefits of AI-assisted forecasting include:

Enhanced lead scoring, which leads to improved close rates. Lead scoring is the process of qualifying or ranking prospects on their perceived value to the organization. By successfully identifying deals that are likely to close early on, sellers can focus on those deals rather than wasting time on prospects who are hesitant to close. And that improves close rates for the organization.

However, human behavior can be difficult to predict, and assessing prospects’ lead scores based on human instinct or gut reactions alone may lead to misread buying signals. RevOps platforms use intricate AI algorithms to translate huge volumes of data into accurate predictions that help teams to prioritize the highest-quality leads. Collective[i] has its own robust data network, the IntelligenceTM network, which includes both first- and third-party data from a variety of sources, creating well-rounded insights that improve close rates.

Maximized customer lifetime value. While sales reps are commonly trained to anticipate customer needs, AI takes it a step further, helping sales reps better understand the intricacies of the customer journey and other market dynamics. When sellers are provided with real-time data that illuminates customer preferences, pain points, and buying triggers, they can provide the kind of customer experience that keeps them coming back to the brand. That increases customer retention and opens the door to up-selling and cross-selling opportunities.

Collective[i]’s Predictive PipelinesTM provides sales managers with on-demand pipeline inspection capabilities so they can assess pipeline health and provide timely, critical insight to bolster their sales teams’ efforts and drive predictable results. Pipeline analysis also translates to recommended coaching opportunities.

Phase 4: Implementation

Finally, the RevOps framework is ready for implementation!

A few final tips for the RevOps rollout:

Document lessons learned from the implementation process. Every organization and implementation will be different. RevOps teams should be as prepared and informed as possible to make strategic changes, but that doesn’t mean there won’t be lessons to learn. Document anything that might be useful to remember and apply in future efforts.

Create a feedback system to understand different departments’ experiences, expectations, concerns, and ideas. Hopefully, the process of creating a RevOps framework and team opened up a collaborative dialogue that doesn’t stop at implementation. If a RevOps team engages in sales planning, forecasting, and other activities but then disbands only to infrequently “touch base” with other teams, momentum can quickly fade, compromising the results.

Since a significant goal of RevOps is to align and unite revenue-generating teams, keeping an open feedback loop can be the difference between lasting success and a rollout that falls flat.

Be sure to check out our guide for revenue operations best practices.

Don’t let technology be an afterthought. What is in a revenue operations platform matters. When evaluating options, think big when developing objectives and small when pinpointing actionable insights within the data. The good news is that the best RevOps technologies are designed for this.

Collective[i] is in the business of sharing intelligence, with a state-of-the-art platform designed to help clients and network members grow revenue. Our proprietary IntelligenceTM network amplifies the efforts of your sales team by providing a solid foundation of actionable data and insights to drive predictable revenue growth. Learn more about how to modernize every aspect of sales with Collective[i].

Work together, win together

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