RevOps Framework: Getting Ready to Drive Business Growth

Over the years, departments’ influences revenue growth has operated as disparate units and plays respective roles in a particular stage of the customer journey. With the change in customer dynamics, the revenue growth is geared toward driving alignment across teams responsible for the customer life cycle experience: marketing, sales and customer success. As businesses today are learning, complete and integrated data can yield far more value throughout the consumer journey than compartmentalized data can. That lead organizations looking to break through these data silos and are turning to RevOps (Revenue Operations), a game changer for customer lifecycle management and revenue growth. The following figure presents high level definition and focus of RevOps.

Figure 01: RevOps Definition & Focus | Source: Compiled by Author from Different Sources | Copyright © 2020 – iammoulude.wordpress.com. All right reserved.

RevOps provide a better end-to-end view to administration and management, while leaving day-to-day processes within the departments. The holistic approach of revenue ops is designed to break down silos between departments. As digital customer experience evolves, the need for various departments to share information has grown; RevOps is the strategic initiative to bring them all together to ensure funnel accountability across the revenue engine.

The Rise of Revenue Operations

SiriusDecisions data collected between October 2018 and December 2018; suggest that Revenue Operations job titles on LinkedIn are increasing across the board. As per the research, although Chief Revenue Officer roles only slightly outpaced Chief Sales Officer titles, Director Revenue Operations surpassed Director Sales Operations titles by a whopping 68%.

Figure 02: RevOps Impact on Job Title | Source: Compiled by Author from Different Sources | Copyright © 2020 – iammoulude.wordpress.com. All right reserved.

So, which factors plays big time to Given Rise to Revenue Operations? Revenue Operations has emerged as a convergence of several factors, at a time when every company in every industry is striving to streamline functions to deliver customer experiences that are consistent across every touch point.

These factors are the reasons why RevOps exists, but as we’ll see later, the vision of what RevOps is intended to do — oversee and optimize sales, marketing, and customer success based on data — may be greater than what humans alone can achieve.

1. The perennial Disconnection between Sales and Marketing Data

In the past, sales, marketing and customer success teams have relied on separate tech stacks and systems (CRM, spreadsheets, business intelligence, marketing automation) leading to big disconnects in data. That disconnection results in teams bringing their own reports to the table, wasting time trying to validate and compare data, and ultimately the inability to make informed and accurate decisions.

2. Customer Expectation of an Integrated Journey

Today’s customers expect to have streamlined, holistic experiences with the brands they do business with. These expectations have prompted organizations to create synergy among departments that have traditionally been silos of marketing operations and sales operations.

3. The Boom in Subscription Economy

The subscription economy model has brought a shift in focus where what happens after the sale is just as important as what happens before the sale. With churn and retention key factors in revenue, Customer Lifetime Value is fast becoming more critical than Cost Per Acquisition. This new business model has created a need for a new operational leader that can provide a complete view of the revenue lifecycle to best manage growth and minimize churn, leading to the hot trend for “revenue” job titles.

4. The Availability of Machine Learning and AI

Today, AI and machine learning make it possible to track, gather, and make sense of data produced from communications and activities generated by your organization’s revenue engine, whether it be traditional or subscription. The combination of new data and technology provide the key insights to optimize and grow revenue.

Requirements for RevOps Framework

A flawless set of interactions by customers with the company is possible when Marketing, Sales, and Customer Success are aligned effectively. According to research by SiriusDecisions, the alignment among the departments can drive up to 36% of revenue growth. In order to design the alignment the followings are needed to be addressed.

1. Agreement on metrics

In the legacy model each team has their own metrics with various levels of understanding across the business. Marketing metrics, such as MQL, are widely accepted but not widely understood; Sales metrics, like pipeline coverage, tend to be well defined and operationalized; Customer Success typically re-uses Sales metrics in lieu of well-defined metrics for expansion.

RevOps owns metrics from end-to-end, ensuring everyone in Marketing, Sales, Success – as well as Finance, Product, and the Executive team – understands core business metrics and how to use them.

2. Credibility and trust between teams

The Sales and Marketing teams are within an earshot of each other. That physical proximity creates intimacy of knowledge and connection, which is an important part of building trust.

RevOps provides operational metrics that support business operations and decisions – such as showing how Sales and Marketing tactics work in concert to drive revenue, detailed segment analysis, efficiency metrics like marginal CAC, and identifying constraints in your funnel.

3. Defined ownership of the tech stack

With RevOps, a single team owns the tech stack used by Marketing, Sales, and Customer Success. Accountability and ownership go hand-in-hand. RevOps manages a close relationship with IT to ensure tools meet security and data management requirements, while changes can be made quickly, responding to the needs of Market, Sales, and Customer Success in real time.

4. Change management

Every tool change creates a cascading impact across the team, roll-outs require project and change management, testing, and training to be successful. Beyond managing changes – the volume of specialized tools creates huge gaps in end-user training. Great enablement helps every team drive revenue through the best use of these tools, maximizing ROI for expensive MarTech systems.

Pillars RevOps Framework: Roles and Responsibilities

Before diving into the nitty-gritty of RevOps team-building, understanding this framework is vital to the success of standing up a revenue operations team.  Even for a small business without the resources to create a full-fledged RevOps team, this framework offers a breakdown of the position, its responsibilities and its overall goals across the business.

Figure 03: Pillars of RevOps Framework | Source: Compiled by Author from Different Sources | Copyright © 2020 – iammoulude.wordpress.com. All right reserved.

RevOps has four areas of responsibility: Operations, Enablement, Insights, and Tools. This creates focus by separating the management of internal and external stakeholders.

RevOps Outcomes Benefits and Outcomes

This holistic approach to drive growth through operational efficiency across the customer lifecycle that impact business growth and profitability.

Figure 04: RevOps Impact on Growth and Profitability | Source: Compiled by Author from Different Sources | Copyright © 2020 – iammoulude.wordpress.com. All right reserved.

The three key benefits are described as below:

1. Align Everyone

RevOps keeps all departments on the same page by treating Marketing, Sales, and Customer Success as their stakeholders. This ensures every initiative has a measurable impact on the full funnel from awareness to expansion. When teams are aligned, they generate 38% more revenue in 27% less time.

2. Create Focus

RevOps enables Marketing, Sales, and Customer Success to focus on their goals by taking on operational and technical overhead. This focuses go-to-market teams on their KPIs — generating leads, closing deals, and expanding accounts.

3. Simplify Everything

RevOps identifies and removes roadblocks in the customer lifecycle, enabling Marketing, Sales, and Customer Success to move faster. A simple, predictable model gives you confidence to invest in high growth efforts, like expanding your Sales teams.

These operational benefits of RevOps have compounding effects on every part of the business. From enabling teams ramp and adapt quickly to team focus on the right opportunities; and right tools save time. These improvements benefit the overall business growth in longer run in following ways:

1. Increase Revenue

Through efficiency gains company can grow the amount of revenue each rep can carry, increasing revenue growth with fewer resources. Besides, by increasing the key levers of growth – volume, value, velocity, and conversion rates you’ll be able to grow faster.

2. Predictable Growth

RevOps brings predictability to the business growth through consistent, accurate measurement. It will create the confidence to invest in new markets, new headcount, or new strategies – and be able to know early when they’re working and when they’re not.

3. Respond to Market Changes

As the business grows, it requires some major changes. Whether the transition is CRM re-implementation or introducing and launching new products RevOps provides communication, training and project management, making internal transitions seamless among the teams throughout the transformation. Smooth transitions reduce the risk of losing deals and wasting time as markets change.

Key Metrics for Revenue Operations

The primary goal for Revenue Operations is to drive revenue — that means closed deals for sales, pipeline growth for marketing and reduced churn for customer success. Here are just a sampling of key metrics Revenue Operations is accountable for:

Figure 05: RevOps Key Matrix | Source: Compiled by Author from Different Sources | Copyright © 2020 – iammoulude.wordpress.com. All right reserved.

Concluding Thought

RevOps reimagines the marketing, sales, and customer engagement processes as no longer linear but cyclical and centered on the customer. The RevOps strategy calls for full-funnel analytics and reporting that adopts the same metrics for marketing as it does for sales and customer departments — that of revenue.

In a nutshell, the key takeaways from the RevOps Framework may be summarized in following points:

• • RevOps works   on   internal   needs,   freeing   up   Marketing, Sales, and Customer Success to focus on the customer.

  • RevOps uses  alignment,  focus,  and  simplification  to  drive  revenue  growth  by  increasing  capacity;  reducing ramp time; and improving core metrics like value, volume, velocity, and conversion rates.

  • Establishing a data foundation is critical with continuous ID resolution across contact, company and parent account is critical.

  • Marketing should be involved in the entire customer lifecycle and has to adopt metrics that will prove meaningful across revenue-generating teams, whether they are focused on creating opportunities or completing a sale.

  • Sales needs to connect with prospects much earlier in the customer lifecycle to better direct and influence each stage of cultivation.

  • Better integrated customer success operations will be able to respond to customer expectations more effectively with a full understanding of the customer journey. This includes tapping into sophisticated analytics based on comprehensive data to help identify when customers are likely to want to make a purchase.

References:

1. The Essential Guide to Revenue Operations. ClodKettle
2. The RevOps Framework. FunnelCake Inc. (2017)
3. Unlock RevOps Team Effectiveness with Data and AI. People.ai

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