Revenue operations (RevOps) is the business process of maximizing revenue potential by breaking down silos between departments and driving full-funnel accountability across a company. RevOps is typically set up as a department on the same level as revenue-generating teams to work in collaboration with them. The RevOps team may comprise full-time employees or existing employees drawn from other teams to focus on RevOps part-time.
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By 2025, 75% of the highest-growth companies in the world will deploy a revenue operations (RevOps) model, according to Gartner. Part of the reason for this is because revenue generation for larger businesses is spread across departments and processes, so it’s critical that these departments be aligned. Before RevOps came on the scene, there was no single leader or team who oversaw, streamlined, and united revenue-generating departments.
Without this alignment, businesses are missing out on potential revenue growth and may even be losing money. For example, the average large US business loses $47 million in productivity each year as a direct result of inefficient knowledge sharing.
RevOps aims to change this. Let’s examine the revenue operations meaning, how to develop a revenue operations strategy, and the benefits of instituting this practice.
What is revenue operations?
Revenue operations (RevOps) is the business process of maximizing revenue potential by breaking down silos between departments and driving full-funnel accountability across a company. RevOps is typically set up as a department on the same level as revenue-generating teams to work in collaboration with them. The RevOps team may comprise full-time employees or existing employees drawn from other teams to focus on RevOps part-time. The RevOps definition encompasses the big-picture work of enabling sales, marketing, business, and customer success operations to work together to increase revenue.
It’s easy for departments to become partially or completely insulated from each other’s input, especially if each doesn’t need a lot of external information to function. Customer service may not talk to the marketing department, or sales may forget to touch base with customer success systems. These silos impact every industry and create major revenue losses.
Businesses should focus on revenue operations to develop a high-level approach that unifies and streamlines departments not just to drive revenue but also to improve communication and shift company culture.
What does RevOps do?
RevOps is a high-level function, but when it comes down to it, what do revenue operations do on a daily basis? Revenue operations responsibilities typically include:
Insights and analytics
If revenue-generating departments are to improve their processes and collaboration, they need to better understand the strengths and weaknesses of their existing processes. RevOps should pull reports of metrics for each department and analyze that data to understand workflows, find points where they can be enhanced, and uncover opportunities for cross-departmental collaboration.
Revenue operations aims to remove barriers that prevent departments from communicating with each other and the customers. RevOps may bring enablement practices to all departments and help leaders empower their employees to perform and drive revenue.
Another important function is examining existing processes and procedures and identifying updates or tweaks that may improve performance. Departments should collaborate to explain each of their processes and why they are set up the way they are.
A study by Planview found that teams use an average of six tools for collaboration, and 25% of them use different tools than other teams. This obviously leads to an unwieldy and frustrating workflow and, more often than not, miscommunication or no communication at all. RevOps aims to eliminate this pain point by aligning the use of software, finding tech that works for all parties, and maintaining the tools needed to ensure communication.
Virtual DealRoomsTM is one such tool that eliminates the impossible task of managing endless communication channels and tools. Different departments can all communicate and see deal updates in the same digital channel, which breaks down silos and keeps everyone informed, accountable, and armed with smart recommendations, helping align activities with optimal execution.
Communication tools aren’t the only focus. Often, RevOps can pinpoint tools that eliminate complexity and automate non-revenue producing tasks. Collective[i] offers intuitive end-to-end digital solutions that use artificial intelligence (AI) to save users time and money.
Learning and development
Disseminating information to employees and educating or training them to acclimate them to a new approach, company culture, or new software falls under the responsibilities of revenue operations.
Another way to think about RevOps is to look at it as a tricycle. The three wheels would be:
The right processes and procedures must be implemented company-wide to facilitate and encourage a culture of collaboration. Tweaking old procedures and putting new ones in place can help departments become more in tune with each other, leading to standardization and increased focus on the main goal: driving revenue.
Like departments, data can also be siloed. Having accessible, shareable, and usable data is vitally important to generating a clear and accurate picture of the revenue pipeline and how each individual impacts it. RevOps’ focus on streamlining technology and aligning all departments to the same technology creates a single source of truth for all departments to refer to and use to make data-based decisions.
Collective[i]’s toolset includes the data and metrics tools that RevOps needs. Our proprietary network, IntelligenceTM, connects revenue-facing professionals who can help each other and augment those relationships with knowledge about buyer behavior. These interactions are transformed into invaluable insights, forecasts, and opportunity odds for sellers. Intelligent InsightsTM uses AI and machine learning to create a daily to-do list of next best actions for sellers that will make the most impact.
A business’s employees are responsible for implementing a revenue operations project, whether a dedicated team or individuals in each department who come together. The team or individuals must be able to interface with all departments to clearly convey the importance of revenue operations and get buy-in from all collaborators within the company.
If one of its wheels is detached or malfunctioning, the company can’t move forward. Well-functioning revenue operations ensures that all departments are aligned, operating in tandem, and going in the same direction.
Is revenue operations the same as sales operations?
There is sometimes confusion around what is the difference between revenue operations and sales operations. The major difference in revenue operations vs sales operations is the scope: Sales operations oversees the B2B sales process, while RevOps is responsible for the operations across all revenue-generating departments.
What these two functions do is very similar. Just like sales operations, RevOps makes sure people can do their job efficiently and effectively, leading to greater revenue. However, RevOps does this for marketing and customer success systems too, while keeping all departments aligned and focused on the same goals.
What is revenue operations vs business operations?
When looking at what business operations means and comparing it to what revenue operations means, many commonalities come up. For example, RevOps shares the same high-level view as business ops.
RevOps and business operations are focused on processes, platform, and people — and they also both support revenue-driving departments such as sales and marketing. The goal of business operations departments — accounting, HR, and legal — is to support revenue-driving departments, while RevOps both supports and aligns them.
Revenue operations and business operations need to interface with each other to both avoid creating a larger silo and simultaneously break down smaller silos between the revenue-generating departments. RevOps would do well to incorporate business operations insights into alignment strategies to improve the revenue processes and procedures.
RevOps and business operations teams can benefit from having a space where they can meet and collaborate. Collective[i] provides this alignment tool with Virtual DealRoomsTM, a streamlined communication tool that allows leaders to meet and discuss strategy.
Why is revenue operations important?
Business as usual doesn’t cut it anymore. Factors like the quick pace of technological advancements and the emphasis that millennials and Gen Z generations put on company values have shifted the way that business is conducted. Companies also have to adapt to other variables, such as the amount of information available to customers or a global pandemic that has impacted every industry worldwide. A blueprint that worked in 2019 won’t give the same results in 2021.
Revenue operations enables businesses to keep up with these shifting elements and stay ahead of the curve. It also keeps employees engaged and invested in the company. If your teams are frequently expressing the following sentiments, it is past time to set up a RevOps framework:
“I’m not sure what is working and what’s not.”
RevOps can help develop a holistic approach to data and implement cutting-edge technology that acts as a single source of truth, which all departments can then access to make data-driven decisions that yield maximum results. Collective[i] provides a comprehensive approach to data, using multiple forms of AI — such as Robotic Process Automation, machine learning, deep learning, and neural networks — to analyze a unique blend of historical and real-time data from multiple sources. That drives compelling insights for RevOps to use in developing clear strategies for revenue-generating departments.
“There are too many tools!”
Alignment, alignment, alignment. It can’t be emphasized enough — RevOps is vital for getting all departments on the same page and eliminating inefficiencies. This core competency of revenue operations is something that is often wished for but rarely implemented. RevOps turns the goal of alignment from an abstract “that would be nice to do” into a reality.
“This process is really frustrating” / “Why do we do it this way?”
So many processes and procedures exist simply due to tradition. A study by Perficient found that 88% of businesses rely on outdated methods for order management, the process of receiving, tracking, and fulfilling customer orders. It’s not just order fulfillment that suffers from this phenomenon either: A study by Planview found that the number one cause of wasted time during the workday is inefficient and duplicated processes. RevOps analyzes existing processes, eliminates or improves them, and encourages buy-in from employees by educating them on why and how to use these processes.
What are the benefits of revenue operations?
Cross-department alignment and collaboration aren’t the only benefits to RevOps. As the name implies, increased revenue is the major benefit. The Boston Consulting Group found that B2B tech companies that used RevOps had a 10–20% increase in sales productivity. Its research also showed that alignment between the teams led to:
- 100% to 200% increases in digital marketing ROI
- 10% increases in lead acceptance
- 15% to 20% increases in internal customer satisfaction
- 30% reductions in go-to-market expenses
- 71% higher stock performance for public companies
By implementing accurate and consistent measurements, RevOps leads to predictable business growth and enables businesses to adapt to market changes. Modern tools such as AI-enabled software bolsters RevOps teams, giving them the high-level view they need to keep businesses agile.
In fact, if RevOps is looking for a high-level view of the revenue pipeline, Collective[i]’s Predictive PipelinesTM provides just that. RevOps can use it to review pipelines and provide critical information to all the teams who need to have it. Transparency promotes better collaboration amongst sales, marketing, and customer success to improve outcomes.
What are common revenue operations metrics?
Because revenue operations relies so heavily on numbers, it is extremely important to have the best revenue operations software available. Here are some key metrics that RevOps relies on:
- Win rate: How many sales opportunities are converted into customers. Looking at the win rate, businesses can pinpoint the top performers on the sales team and the time periods that produce the strongest likelihood that a prospect will turn into a customer. That will help teams identify areas of opportunity.
- Sales cycle time: How long it takes from the first contact to closing the deal with customers. It is important to examine where prospects are being lost in the pipeline, what determines the sales cycle length, and what variables affect this length.
- Customer acquisition costs (CAC): The total cost of capturing a new customer. This may include salaries, equipment costs, marketing costs, etc.
- Pipeline velocity: How quickly leads move through the stages of the revenue 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/upsells: The percentage of revenue made from customers committing to a new contract or subscription or from selling new products to current customers.
- Forecasting sales: The expected revenue and the predictability of the revenue. Knowing the expected revenue contributes to RevOps’ high-level understanding of the sales process.
- Customer churn: The percentage of customers that are lost during specific time periods.
Many types of revenue operations SaaS solutions rely heavily on historical data to generate these key metrics. Yet while there is value in looking at past performance and sales, the past does not necessarily give a reliable view of the future.
SaaS solutions that incorporate real-time market sources or public data from buyers and competitors generate well-rounded metrics and insights that don’t just rely on the past. ReVops needs to be proactive, not reactive, and leaning on historical data alone just doesn’t cut it.
At Collective[i], our approach is similar to cutting-edge intelligent applications such as Waze. Our AI neural network leverages data, communities, and connections to deliver valuable insights and assist sellers in creating streamlined buying experiences.
How to develop a revenue operations strategy
It can be daunting to develop a revenue operations framework if there is nothing currently in place. However, the first place to start is to determine what structure is right for the company. There are two approaches to choose from:
Create a dedicated RevOps team Even a one-person RevOps team can provide the oversight needed without burdening employees with extra responsibilities. This approach works well for companies that have the capacity to bring a knowledgeable leader and/or team of people onboard to fulfill these functions.
Assign specialized roles in different departments A RevOps team may also comprise employees from different departments. This works well for companies that have limited resources — they can always choose to consolidate those responsibilities into a dedicated RevOps team as they scale.
Once the structure is determined, next comes these phases:
Build a solid foundation of data Set up a revenue operations platform that can be used to evaluate the revenue pipeline with analytics and metrics and make data-based decisions. The best chance of success comes from using the right tool; relying on old technology won’t yield the desired results. Using the extensive product line offered by Collective[i] enables businesses to have the most modern, advanced tools to help generate the most amount of revenue possible.
Audit the customer journey Find the disconnects along the revenue pipeline. Consider customer touch points such as existing content, websites, and other digital footprints, as well as internal things, such as the technology used by marketing, sales, and service departments.
Create alignment and solicit buy-in from internal stakeholders After using the metrics to develop newly improved processes and procedures, educate and engage the departments in adopting these new changes and using them properly.
Using these phases will start the process of building a revenue operations strategy that transforms company culture, eliminates silos, and ultimately increases revenue.
Data-driven intelligent tools such as Collective[i] support and enable a company to successfully implement a revenue operations strategy. It is time to revolt against limiting technology and business as usual. Discover how to revolutionize RevOps. Get started with Collective[i] today.