The rise of the subscription-based economy has changed the way businesses need to conceptualize their customer journeys and business goals. These changes have given rise to what is known as “revenue operations” or RevOps.
“Revenue Operations is the alignment of marketing, sales and customer support operations across the full customer lifecycle to drive growth through operational efficiency where all commercial teams are accountable for revenue.”
Driven by the increased access to marketing, sales and customer data and increasingly sophisticated MarTech tools, RevOps is a strategic approach to aligning all commercial teams and roles around the customer journey with the ultimate goal of growing revenue.
The key element in utilizing the RevOps framework to successfully adapt to these market changes is the RevOps Flywheel.
The RevOps Flywheel
The RevOps flywheel is an effective framework because it transforms operations from a traditional funnel to an ongoing commercial cycle:
Compare the flywheel framework above to the traditional sales funnel:
As you can see, using the RevOps flywheel puts the customer at the center of all commercial operations, aligning marketing, sales and customer success teams with the full customer experience instead of siloing teams and preventing efficient handoff from team to team.
By giving all commercial teams insight into the full customer journey, those teams are able to not only more effectively bring in new business, but also better maximize customer lifetime value through better retention and increased up-selling and cross-selling.
Marketing Operations in the RevOps Flywheel
Within the RevOps flywheel, the marketing team’s responsibility expands from capturing new leads to include supporting sales and customer operations in closing prospects and maximizing the value of existing customers.
Marketing integrates with sales and customer operation in 3 key ways:
Messaging: Creating, testing and optimizing the key messages to help salespeople close more prospects and support officers to better engage customers. This messaging addresses and overcomes prospect objections and customer pain points to shorten the sales cycle and minimize customer churn.
Prospect education:According to Pardot, 70% of the purchasing process is completed by a prospect before they ever reach out to a company’s sales force. By working within the RevOps flywheel, marketing supports sales by reaching these prospects with educational messaging and content to educate them on the value and benefits of a company’s offering. Reaching these customers earlier will shorten the lifecycle and accelerate sales.
Customer engagement: Utilizing data from customer and sales operations, marketing teams are able to engage with customers after the purchase, delivering messaging an educational content with the aim to sell more products, reduce churn/cancellations and transition customers into brand advocates.
By aligning marketing operations with the later stages of the buying cycle, the marketing team is empowered to contribute more value to a business’ revenue operations, helping to establish long-term, predictable growth.
Sales Operations in the RevOps Flywheel
Using the RevOps flywheel as a framework, the contribution of the sales team extends beyond purchase and increases the overall value of existing customers. Instead of focusing on traditional selling points such as features, benefits or price, sales operations instead works with prospects to identify their needs and help to guide them in choosing the best solution for them.
This process, known as consultative sales, uses sales teams to build and nurture relationships with prospects before the conversion, creating more value for both customers and businesses.
By focusing on consultative sales and building relationships, sales teams help to create more loyal customers who are less likely to cancel accounts and are more likely create more opportunities for up-selling and cross-selling in the future.
The consultative sales process also brings sales teams into closer alignment with marketing teams by using tactics and channels that have been traditionally considered marketing channels. Using these channels - such as LinkedIn, Twitter and other social media platforms - as a way of engaging with prospects and avoiding hard sell tactics is known as social selling.
Using consultative sales to more closely integrate sales with marketing and customer success also makes it easier to get referrals from within their network, a critical source of sustained revenue growth that is accelerated by using the RevOps framework for commercial teams.
Customer Operations in the RevOps Flywheel
When working in the RevOps framework, customer success roles expand from merely onboarding and support tasks to focus more on ongoing customer marketing. If you are unfamiliar with this phrase, customer marketing refers to marketing activities targeting existing customers rather than new customers.
Creating an effective customer marketing program is an essential step when transitioning from a traditional commercial setup to the RevOps flywheel. Taking on customer marketing creates 3 big-picture benefits for a business:
Better retention: It’s widely known that retained customers are more profitable than new customers. In fact, Gartner research found that up to 80% of a business’ revenue comes from 20% of its customers. Designing and launching campaigns to address the specific needs of existing customers should, therefore, be a top priority for all customer success teams.
More referrals: Creating a positive customer experience to help turn customers into advocates will not only protect existing revenue, but it will also create new revenue through an increase in word-of-mouth marketing and customer referrals. Since becoming an advocate makes a customer 75% more likely to share a positive experience with his or her network, customer marketing becomes an integral part of RevOps success.
Customer success also contributes less directly to increasing revenue through the RevOps flywheel.
The fact is, the data a company has on its customers is some of the most powerful data it can own. It reveals an audience’s wants, needs, problems to overcome and questions to answer. The data and insights available via customer operations, as well as the insights generated by customer marketing campaigns, becomes the bedrock upon which marketing and sales operations are built.
By operating off of unified customer data, commercial teams are able to capture and better nurture more leads, establish more valuable consultative sales relationships and better serve existing customers all at the same time.
Benefits of Adopting the RevOps Flywheel
Incorporating the RevOps flywheel into a business’ commercial operations allows teams to unlock several important benefits:
Better alignment: Since the RevOps framework centers all revenue-generating efforts around the customer, instead of function, commercial teams are able to better align with one another. Breaking down the siloes between marketing, sales and customer operations gives insights into how teams can better support each other to achieve unified team goals.
Increased efficiency: By utilizing a flywheel framework to break down siloes, commercial teams will work together more efficiently. Because all team members are working from the same dataset they are now able to all “speak the same language”. By using fit-to-purpose and integrated tools, time is no longer wasted gathering data from multiple platforms to synthesize into reports. Instead, the RevOps team works like a well-oiled machine.
Multiplying the value of individuals: The value of a flywheel, instead of -the traditional linear model, is the fact that each phase of the customer journey is improved by efforts, successes and insights from the previous phase. Marketing is able to use customer success data to attract more qualified leads using messaging and content that facilitates a more effective consultative sales relationship. This, in turn, builds a solid base for customer marketing efforts to maximize overall customer value.
When all three of these RevOps benefits have been fully realized, a business’ commercial operations become almost a self-sustaining system, with each section of the flywheel feeding into the next to quickly accelerate and sustain revenue growth.