The RevOps model is a solution for businesses in which alignment between sales and marketing isn’t already part of the culture. This model can also transform businesses whose buying process has become too complicated or difficult for the target customer. Through a RevOps model, all the departments that impact revenue are united in strategy, vision, and intention.
Read more below.
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B2B sales isn’t what it used to be. According to Gartner, when prospects are comparing multiple suppliers during a buying decision, each supplier’s sales representative gets only 5% to 6% of prospects’ time and attention. Instead of talking with sales, buyers spend 27% of their time doing online research and another 18% researching their prospective suppliers offline.
The availability of information about a company has a huge impact on whether a prospect will close a deal with that company — perhaps even more than sales does. That’s why marketing, the team responsible for producing that publicly available info, has become so integral to the sales process. In today’s environment, sales and marketing have to be aligned, and the way to do that is with RevOps.
The RevOps model is a solution for businesses in which alignment between sales and marketing isn’t already part of the culture. This model can also transform businesses whose buying process has become too complicated or difficult for the target customer. Through a RevOps model, all the departments that impact revenue are united in strategy, vision, and intention. Let’s talk more about the role of RevOps within an existing organization, and the RevOps strategies and tools leaders can use to achieve success.
What is the role of revenue operations?
Revenue operations is an emerging business function at many B2B organizations, representing a reaction to how customer-purchasing processes have changed. Sales is no longer solely responsible for achieving and growing revenue. With B2B customers investing so much time in research before a purchase, marketing is also essential to revenue.
Customer success is also playing an increasingly relevant role in revenue. Of the companies that responded to a CFO Research survey, more than half said that 40% or more of their revenue is recurring, or from a subscription or usage-based model. That places a huge responsibility on customer success teams to keep customers happy so they continue to subscribe. The subscription trend is accelerating. According to a global study, “Membership Economics: How to Make Money From Membership and Subscriptions,” conducted by Manifesto Growth Architects, 70% of business leaders believe a subscription business model is going to be central to business success moving forward.
As such, companies need to make sure that all departments are collaborating cohesively to support the customer journey. And the role of revenue operations is to align marketing, sales, and customer success teams in order to achieve transparency into what drives revenue throughout the customer journey.
Is operating revenue the same as sales?
Revenue is the overall income the company generates from all revenue streams before any expenses are deducted. Sales income, on the other hand, is money generated by selling to new customers or upselling existing customers.
With the rise in subscription-based business models, revenue now often depends on customer success efforts just as much as the work of sales and marketing. This emerging interdependence and need for collaboration is why so many B2B industries are now using a RevOps approach to align these departments.
What is a revenue operations team?
A revenue operations team oversees four primary areas of responsibility: operations management, sales enablement, analysis and insights, and operations technology.
At the top of the revenue operations org chart are roles that help strategize business objectives and allocation of resources.
Based on the high-level decisions made by operations management, RevOps then assumes responsibility for alignment between marketing, sales, and customer success to empower each department to grow revenue as much as possible.
Analysis and insights
RevOps teams must also track success metrics and report back to stakeholders and employees about what strategies are working and what changes could achieve even better outcomes.
Last, revenue operations chooses, deploys, and maintains the IT solutions and software that help cross-functional teams communicate and succeed.
The demand for these skills in revenue operations has led to a massive growth in revenue operations job titles: Over six months in 2019, the number of individuals identifying themselves as directors of revenue operations on LinkedIn increased 90%. Here is a list of a few other revenue operations titles that continue to grow in importance:
Revenue operations job titles
- Revenue accountant: Someone who keeps track of incoming funds and expenses owed that will impact revenue
- Revenue operations analyst: A revenue accountant who also shares data-driven insights and strategies to grow revenue
- Revenue operations manager: Someone who decides on strategies and creates processes to drive revenue
- Revenue cycle manager: A manager who oversees accounts and helps resolve any revenue cycle problems
- Director of revenue cycle: A leader who collaborates with employees to improve revenue documentation and implement best practices
- Director of revenue strategy: A director who assists with communicating and analyzing the impact of revenue growth strategies and leads iteration
- VP of revenue operations: Someone who designs and administers the processes and programs that drive revenue growth
- Chief revenue officer: A leader who leverages deep knowledge of marketing, sales, and customer success to direct and grow a company’s revenue streams
What is RevOps strategy?
While the exact plans will differ from business to business, there are a few high-level steps every organization can take to design a winning RevOps strategy.
Understand business capabilities
Depending on the size of the organization, a company may appoint one person to lead existing internal leaders in a new revenue operations initiative. Larger companies may want to fill several roles to align efforts between marketing, sales, and account service.
Survey available resources
Once a company has identified who will lead and support RevOps, it should pinpoint resources such as collaboration tools and revenue operations software. Companies may consider moving to new software that leverages artificial intelligence (AI) and automation to streamline processes and empower revenue operations leaders to focus on success, such as the Collective[i] platform.
Align the team
In the last high-level step in developing a RevOps strategy, it’s important to survey the processes across departments and strategize how they can align. Determining the baseline may reveal areas needing improvement.
Across all these steps, it’s important that companies know what metrics will measure the success of their revenue operations and show where processes can be improved.
Revenue operations metrics to consider
Sales forecast accuracy
According to Miller Heiman Group, fewer than 20% of organizations achieve sales forecasts that are 75% accurate or more. Companies can use RevOps to assess the accuracy of sales forecasts and identify AI-enabled tools that make sales forecasts more accurate. For example, Intelligent ForecastTM removes error and human bias and reduces the time sellers must spend creating the forecast to begin with. This means organizations can act swiftly to change outcomes for the better.
Pardot reports that 79% of marketing leads never convert into sales. Revenue operations help organizations identify gaps between these departments and convert more leads. Collective[i]’s Intelligent InsightsTM helps sellers identify the hottest leads from marketing and efficiently act on them to achieve a big impact on the bottom line.
Sales win rates
The average conversion rate for B2B services is about 3%. A B2B sales cycle can take up to three months to close for low-cost deals and six to nine months for higher-value deals. Shortening the timeline, or increasing the conversion rates, are both wins that can result from implementing revenue operations, especially when supported by deep learning.
Cost of customer acquisition
Industry experts agree that the ideal customer acquisition cost equates to 25% or less of their lifetime revenue. If a company is spending more than this, it can implement RevOps to identify where improvements can be made in the customer acquisition process. After the process has been altered, RevOPs can measure the improvements on the cost of customer acquisition, which can be tangible proof of the success of revenue operations in aligning marketing and sales.
Annual recurring revenue
Among businesses with a recurring revenue business model, 48% struggle to meet the accounting and reporting challenges that come along with it. A dedicated revenue operations accountant or analyst is committed to addressing those challenges.
Renewals and upsells
According to 85% of B2B companies that responded to a 2019 survey by Gartner, there are hidden opportunities for growth within their existing accounts. Gartner says that marketers and customer service teams are spending two-thirds of their time committed to account retention and growth. Revenue operations integration enables companies to adopt more intelligent, efficient strategies around these opportunities.
By tracking these metrics, the RevOps team can build a revenue operations roadmap to success, monitoring and improving business operations in order to increase revenue.
Is there RevOps training?
While there is continuing education that can support the implementation of revenue operations, these courses tend to fall into more specific disciplines. For instance, revenue management training, marketing certifications, sales training, and customer service or account management training can all support a successful transition to revenue operations within a business.
Additionally, the departments within a business may need support to meet and collaborate with one another, especially when silos have been established for some time. When internal experiences that support the vision aren’t curated by leadership, 70% of all organizational transformations fail. Identifying and celebrating early successes in the transition are equally important to maintaining buy-in.
On a practical level, any new software being deployed to support a transition to RevOps may necessitate internal training to facilitate user adoption.
Revenue operations best practices
As a company adopts revenue operations to replace siloed departmental ops, there are more high-level best practices to keep in mind. These include:
Put the customer first
The purpose of adopting revenue ops is to improve the customer experience, and the alignment between marketing, sales, and account service that does so is unique for each business. C[i] RecommendsTM helps sellers know what next steps to take to build relationships and close deals, taking into account the market and socioeconomic indicators that are immediately impacting the economy. This empowers a proactive versus reactive approach.
Define shared goals
Everyone in the collective RevOps team shares a goal of driving revenue. But each department also brings unique insights about the historical best practices that have allowed it to succeed within a silo. As these processes are integrated into one revenue operations cycle, each team’s perspective should inform the shared goals that establish the success metrics moving forward. Feeling heard and understood also helps each team member buy in to the new processes and procedures. At the same time, a predictive analytics tool can ensure that an overreliance on the lessons of historical data does not limit the potential of revenue operations to transform the sales cycle.
Reporting and analytics
Reporting about leads in the pipeline is essential for the success of revenue operations, but updating the CRM and sharing other insights can be a huge time sink for the sales team. Tools such as Intelligent WriteBackTM from Collective[i] automate updates to the CRM, not just from sales communications but also from authorized users in marketing, customer service, legal, and beyond. This means every RevOps team member has a central location to check in on the state of the pipeline and view accurate forecasts.
All the other best practices on this list empower employees to do their best work on their terms. The work of revenue operations is establishing shared definitions, messages, and processes between teams and departments. When all the departments that impact revenue growth are aligned, the outcome is more efficient, sustainable, and predictable revenue growth.
Revenue operations software
As a business explores the potential for software to empower a transition to revenue operations, it should consider the following functionality:
Revenue operations software should increase the predictability of revenue. Tools that integrate third-party data sources and buyer-specific insights improve the sales forecasting process, so sellers and sales managers can better predict and control which deals will close and when. Such insight doesn’t just increase the predictability of revenue growth in real time but also helps sellers focus on each lead in a way that improves the odds of growing the business.
Collective[i]’s Predictive PipelinesTM allow sellers and their managers on-demand insight into the status of the sales pipeline, including odds optimizations for moving each prospect to the next stage of exploration.
Revenue operations software also should improve cross-functional efficiency. It should empower every member of the revenue operations team to understand the value propositions, personalization efforts, and social-selling practices that move the needle, enabling them to be better focused. This improved efficiency can’t just result from analyzing what has worked historically for each department but also must be rooted in real-time third-party insights about changing customer expectations and needs.
Collective[i]’s platform represents potential for end-to-end digital transformation in revenue operations. For example, C[i] RecommendsTM provides sellers with a daily checklist of the next best actions they can take to pursue revenue more efficiently and meaningfully. Plus, integrated Virtual DealRoomsTM provides a centralized location for every party involved in a sale to communicate touchpoints and progress without long email chains or other delays in the process.
The right revenue operations software enables growth. Teams should use tools that integrate seamlessly into the new model of operations — and that may mean letting go of old software that no longer fits. Consider the tool’s alignment with your strategic goals, key performance indicators, and emerging technologies that competitors will be using to seize a greater market share.
Collective[i]’s neural network is one of the most powerful deep learning tools available to revenue operations teams today. Drawing on a wide range of robust data sources, the platform learns from the behaviors and best practices of a business as well as those of competitors, prospective buyers, and sellers in different industries. Leveraging all this data, the neural network recognizes patterns and makes predictions that go beyond the potential of any one person or team to realize. All this is achieved with respect to personal privacy, data regulations, and other concerns. Through this platform, members of the revenue operations team achieve greater insights and actionable recommendations to increase growth on previously unprecedented terms.
Empower revenue operations automation with Collective[i]
As an emerging business function, RevOps has the potential to permanently transform businesses in a way that aligns them with the future expectations and requirements of customers. We invite you to explore the Collective[i] platform as a resource for turnkey revenue operations enablement, and see how these insights could be the answer to many barriers within each unique organization.