Published on Tuesday, March 15, 2022
In recent years, the methods used to search for desired products have changed significantly. The shift is largely a result of e-commerce, which makes more product information available to consumers at just a click of a button. How can your online company compete in this fully digitized world? Investing in revenue operations may be the answer.
What Is Revenue Operations (RevOps)?
Revenue Operations, also known as RevOps, is a B2B and B2C strategy to align siloed revenue teams within companies and to unify revenue goals and targets. RevOps encompasses marketing, sales, customer success, customer support, and finance. It combines processes necessary for gathering sales data, marketing reports, and customer service info. RevOps focuses on creating a singular framework where multiple departments have full insight into how each one operates and what to expect from work processes. For example, a customer service team that understands a client’s complete purchasing history and customer satisfaction can provide further information to the sales department to better handle future sales opportunities when working with that client. The sales team could also send information to marketing to help identify opportunities for promotional efforts.
The goal is to allow everyone to be on the same page, boosting the potential for the business to bring in more revenue. This contrasts with having siloed departments that each have their own sets of data, targets, and processes. When each department has to analyze and monitor metrics along with their targets, this might lead to disjointed business goals, miscommunication, or blame-shifting during strategy meetings. When it comes down to it, great communication is one of the most important tools that drive successful companies forward. By investing in a great customer relationship management (CRM) platform, you can regularly update all of the data that your team needs to make the next sale.
Revenue Operations vs. Sales Operations
Revenue operations are a different practice from sales operations. Sales operations or SalesOps focus on reducing friction during the sales process and on ensuring the sales team has the materials and resources necessary to do their jobs. Sales Operations encompasses everything from sales strategy and territory planning to managing sales software and determining commission & compensation packages. Sales operations are about sales, while RevOps is about revenue growth and integrating the sales, marketing, customer service, and finance departments all in one space. RevOps brings these siloed departments together to create consistent goals. It covers the entire customer’s journey and includes features that go through every part of the sales funnel.
The RevOps process starts with the marketing process and then leads to customer service, where customers are encouraged to purchase a product or service. The RevOps process then moves toward the sales stage and reviews how well consistent sales efforts can be managed. The goals of these two efforts are different. Sales operations are about finding ways to sell products better and faster, while also improving how well the business can manage its funds when selling items. Revenue operations are focused on three separate goals:
- First, there’s a desire to price items for better conversion and margin rates.
- Second, the business must reduce revenue leakage to ensure the group keeps more of what it earns.
- Third, the group uses customer data to find appealing revenue opportunities.
All parties will interact together to create a suitable approach to operational activities. Everyone can manage the data they gather well and create a more thorough approach to content that works.
Why is Revenue Operations Growing?
Revenue operations have never been more essential in today’s business world than now. Businesses use multiple sales channels these days. Some focus on direct sales, while others offer eCommerce services. In-product sales and traditional retail sales are also available. In many situations, a business will use two or more of these at once. There’s also the need to manage various revenue models. One-time sales are common, but subscription-based sales and consumption or usage-based pricing plans are also essential to note. Revenue operations target all the ways how businesses can gather revenues. Companies are changing the ways how they can process revenues and structure them to build growth. There’s a need for transparency and communication between all aspects of a business to see how revenues come from all these practices. Businesses could plan their revenue processes based on the channels they use and their revenue models. But doing so can become complicated as the business grows. RevOps creates a more manageable approach to handling revenue and reviewing how well businesses can grow.
RevOps is also growing because customer behaviors are quickly changing. People are performing more research these days before they consider buying something. RevOps reviews the marketing plans a business might manage and establish, creating a smarter approach to their efforts that fits well and is easy to run. RevOps also works with cloud business models that may require more support. Cloud business plans make it essential for a business to build a more substantial customer experience that the client will be more interested in supporting. The ways how businesses can bring in revenue will continue to grow. The options are plentiful to where businesses cannot handle these points themselves. They will require additional help and collaboration from all parties, and a revenue operations plan will help a business see what is working and plan a unique approach from there.
How Revenue Operations Can Benefit Your Team
Constructing effective processes that support your team and help them to access crucial data when they need it is imperative for continual success in your organization. A couple of things need to happen for this goal to be realized:
- You have to establish unified targets that are aimed at fostering growth so you can increase your company’s revenue.
- The consistent accessibility of company data should be prioritized so that anyone in any relevant department can access customer data at just a click of a button.
- All of the processes put in place need to be aligned with what you are trying to achieve.
- Company data must be analyzed across all departments to make informed decisions that are based on a holistic overview of company performance.
These points are all inherent in a RevOps methodology. By investing in RevOps, you can completely transform the way that your company works.
How Revenue Operations Can Benefit Your Business
Align Your Team’s Revenue Goals and Efforts
Establishing a common vision throughout your company can be challenging. Furthermore, struggling to determine which division is driving revenue can make it hard to replicate that success. It all comes down to disjointed sales and marketing alignment that could end up costing the company a significant amount of money. Revenue operations aim to prevent this by increasing communication and decreasing siloed departments. If implemented properly, RevOps can align multiple teams no matter where they are located by getting everybody on the same page.
Increase Your Organization’s Operational Efficiency
A business thrives when its employees are doing what they are good at. When it comes down to it, your salespeople should be selling, and your marketing team should brainstorm new marketing campaigns. When you invest in RevOps, you will be encouraging your team to do exactly that. If you realize that your sales department is struggling with forecasting next month’s sales, then a shift of duties may be in order. By giving the analytical and operational duties to those that excel in them, like a revenue operations provider, your other departments will be free to play to their strengths and contribute more effectively.
Improve Accuracy In Forecasting
A single framework coupled with shared data increases the company’s accuracy in forecasting revenue. No longer will finance and executive teams make decisions that only benefit one department. The single truth of the RevOps framework allows them to make decisions for the entire organization. There are numerous benefits to investing in revenue operations. Not only can it help you to increase your revenue with time, but it can also help to boost work satisfaction within your team.
Cut Costs And Eliminate Confusion
On average, companies make use of a myriad of digital tools and software solutions in an attempt to make sense of processes, data, and critical information. Most teams are often bogged down by too many tools and don’t have the time to properly make use of them all. If you compare the endless guessing game of trying to determine which tools you can use to the simplistic nature of RevOps, you will see that revenue operations allow you to determine which tools are most needed. By consolidating all your teams’ efforts, the whole company can holistically decide on the solutions and tools that will work across multiple departments. As such, you save costs by decreasing the number of tools you use, and your employees face less confusion about which tools they should use.
The Application Of Technology To Revenue Operations
Many companies have siloed or separate departments that do not share data. They usually bring their analysis and reports to strategy meetings, and this could lead to miscommunication about revenue objectives and much blame being thrown around about who is responsible for decreased revenue. RevOps teams aim to mitigate these siloed departments. They could do this by employing technologies that aid the promotion of a single truth and unified data and processes. The first is employing revenue forecasting software like revVana that has CRM integration, sales bookings management, automation tools, and multi-scenario planning. A single dashboard with a collection of tools makes it easier for unified data sharing.
Next is phone service integration. Sales representatives can record their interactions with potential and existing customers. Managers can easily monitor these calls and correspondence to help align these interactions with revenue targets. Conversational Intelligence tools can further increase data collection through conversation transcriptions. Managers and members of other departments can easily access these transcriptions on a unified platform. The sales department can also have a unified Sales Engagement platform with their emails, phone calls, and social media interactions with customers to analyze which strategies amount to closed sales and renewed contracts. Additionally, the marketing department could deploy automation and marketing intelligence tools to record their strategies. This helps the sales team identify which products or services to focus on. Inversely, marketing teams could gain new insights from the sales team by viewing their sales engagement platform.
Key Metrics for RevOps
The RevOps process will cover many critical metrics. Here’s a look at what metrics appear in the RevOps process:
- Annual recurring revenue – The ARR measures the revenue that comes in every year through a recurring transaction or contract.
- Revenue growth – You can measure how well your business brings in revenue and dictate if the growth is suitable.
- Cost of customer acquisition – The cost involves how much you spend on getting a new customer. Advertising expenses, promotional projects, and other things used to lure in new clients will go into this charge.
- Revenue yield – The revenue yield measures what you get out of your sales work. The yield is the total income you get from one place. It can come from one customer or a grouping of customers who support one product or service.
- Churn rate – The churn rate measures how many customers will no longer do business with you after a certain time. The rate measures how much money you could lose from customers no longer adding to your bottom line.
- Renewal rate – There may be more customers renewing their services with you than you expect. This rate can help you measure what is happening in this situation.
- Revenue backlog – Your business could have contracted revenue it has yet to collect. The revenue backlog measures what you need to collect and helps you identify if you’re bringing in enough money for whatever interests you the most.
- Forecast accuracy – The accuracy measure covers how well you’re able to predict sales. The measure works for short and long-term sales alike. It helps you analyze how well your business manages its sales and if it is bringing in enough money.
How to Know If Your Organization Needs to Transition to RevOps
Your business could benefit from RevOps processes if you’re dealing with any of these issues:
- Your departments aren’t interacting well with each other. They might spread the wrong bits of information between departments.
- Your revenue targets aren’t linking with your sales forecasts.
- You are bearing too many errors or defects in your deliverables or processes.
- You are using too many software platforms in various departments. These include setups that might be too hard to manage in some situations.
- There are too many repetitive and manual actions or processes in your business. These actions could make it harder for your business to stay profitable, as repetitive actions can increase expenses.
- The metrics in your business aren’t matching between departments. One group may report different statistics versus another.
- You are struggling to gather all your key data elements in one place. These include elements like your product and account data, the quotes for orders, contracts you hold, invoices, and payments of value.
These are problems that any business could experience, especially as they grow and try to keep up with additional sales materials. The process can be complicated, but a revenue operations program will help you analyze your work and find a plan for the process that is easier to follow and support.
Transitioning To Revenue Operations
There is no single method of employing RevOps in a company. One company might decide to reshuffle departments to have sales, marketing, and customer success under one umbrella. Or they could choose to align processes and data on a unified platform. Companies can determine how to implement the shift in operations by looking at their service or product and customer base.
The Future of RevOps
The RevOps world will keep growing, especially as new RevOps job titles are being introduced in many work environments. Businesses are aiming to build goals and incentives among departments while concentrating on overall revenue gains. This includes getting all parties together in one place to understand how well their projects can grow and what they can expect from the time and effort they’re putting in. RevOps will likely start focusing on mobile operations soon, especially as more businesses become visible through mobile platforms. Blockchain-based RevOps processes may also become accessible in the future, as businesses will need to produce more secure and unique approaches to managing their operational activities.
Other things to spot in the future of RevOps include looking at further automation in the industry and increased emphasis on understanding how customer retention efforts work. Further research and review in the field are necessary for ensuring a business can stay active and viable. Not all new developments in the revenue operations world will be suitable for everyone in the business. But you can expect the industry to keep growing as more parties notice its benefits and experience how well the field can change and shift. You may notice some substantial positives in what is open when you look at the industry and see how it evolves.
Explore How Revenue Operations Can Work for You
Revenue Operations can make a world of difference for your business. You will have an easier time managing your company through a plan that focuses on these key processes. You can get everyone in your business on the same page while streamlining each step to make them easier to follow. The potential for your business to bring in more revenue will also be strong as every team keeps the financial side in mind. Be sure to look at how investing in Revenue Operations can help when you’re trying to grow your business and expand your offerings. RevOps gives you the control you deserve within your organization. Contact us today for a demo!