Revenue Operations, or RevOps, is an increasingly popular topic and is now one of the most talked-about subjects, particularly in the tech, start-up and subscription-based sectors.
There is, however, lots of confusion about this new term and how it impacts established business functions like Sales Operations. As such, we thought we’d clear-up some of the main misconceptions by defining the main differences between RevOps vs Sales Ops.
We have a post, explaining Revenue Operations in more detail, so we’ll initially focus on defining what Sales Operations is and then go into some detail on the main differences between the two and, importantly, where team responsibility starts and stops.
What is Sales Operations?
Simply put, Sales Operations allows sales teams and sales individuals to be productive and successful. It allows them to focus on what they’re good at - closing sales.
Sales operations encompass all the foundational and functional elements of a sales organization that supports salespeople to do their job well; sales strategy, lead generation, commission and compensation planning, team and territory structure, CRM, tools, metrics, and reporting.
“Sales operations encompasses all the foundational and functional elements of a sales organization that supports salespeople to do their job well”
In addition and, importantly, it aligns the sales teams so they understand the targets the team, and individual sales-people have to hit to match their sales key performance indicators and, ultimately, get their commission.
There are numerous resources available for those that want to understand more about Sales Operations, with “What is Sales Operations?” by Sales Hacker is one of the most comprehensive.
What are the differences between RevOps and Sales Ops?
The key difference between RevOps and Sales Ops is the broader nature of revenue operations. Whereas sales operations focus internally and support sales individuals to be more productive and close more deals, revenue operations look externally at how the customer purchases products or services, and supports them to make the purchase decision in a way that works for them.
“Sales Operations focus internally and support sales individuals to be more productive and close more deals. Revenue Operations look externally to how the customer purchases products or services and supports them to make the purchase decision.”
As a result, RevOps brings together all commercially oriented teams, Marketing, Sales, and Customer Success to create a cohesive commercial engine and develop a cyclical journey for a customer; as opposed to the linear funnel journey which most siloed teams adopt, particularly those responsible for sales.
The customer, more so than ever before, has control over their purchase decision, and revenue operations is focussed on giving the customer the right information they need at the right point in their decision-making journey.
If they’re just researching, revenue operations allows them to research, if they are ready to purchase, RevOps connects them with a consultative salesperson. Revenue operations bring together strategy, technology, and processes to align teams and deliver unified revenue goals.
Broadening the scope to RevOps makes it easier to align teams and ensure they have centralized goals, as opposed to individual targets defined at the team level. This combined with the adoption of centralized processes will ensure the customer is the focus regardless of the stage they are within their journey.
Roles and Responsibilities
The goal of a sales team compared to a revenue operations team is, in many ways the same, but there are subtle differences to roles and responsibilities which will inevitably impact how individuals within each team think and operate.
The Sales team’s main focus, rightly so, is to close more sales. These sales generate revenue for the business and commission for the individual - everyone is happy! Close the sale, pass the customer onto the Customer Support team, and move on the next lead. The sales individuals do what they need to close the sale, not necessarily close a long-term customer - “retention is the job of the support team”. That’s not the case with RevOps.
The traditional sales operations process is a model that works for many businesses and will continue to do so. However, the role of a well functioning RevOps team is to not only close the sale but to make sure that customers get long-term benefit out of using your products and services. Ideally, each closed sale should become a long-term customer, an advocate, and as a result, contribute their part to future sales.
“The role of a well functioning RevOps team is to not only close the sale, but to make sure that customers get long-term benefit out of using your products and services.”
RevOps makes sure the business speaks to the right customer, gives each customer what they need to understand a business’s offering, answers their questions or concerns through a consultative sales process, and then gives them the education they need to make the most of the services provided.
It’s a more holistic view of a customer relationship rather than simply focussing on closing a sale.
The major benefit of having a broader commercial team focus is that you can formulate, adopt and execute a centralized and efficient revenue ops focussed process to support the entire commercial engine of your business.
Implementing these important processes across the entire commercial team provides a strong and consistent foundation upon which teams can execute and deliver on. It also allows you to more easily define and, importantly, align:
Your overall or product or service-specific go-to-market plan.
Plan what materials need to be created and when.
Define success metrics.
Execute and measure.
The centralization of these processes maintains a level of accountability which is difficult to assert in businesses with siloed marketing, sales, and customer support teams.
Reporting and Key Metrics
There is more data than ever available and a centralized data reporting tool is a must for any Sales or Revenue Operations team. However, whilst the sales focussed metrics will and probably should always be looked at and measured, the metrics that a revenue operations focussed team (including sales) will be broader in nature:
Sales Operations Metrics
Number of Prospects - the number of potential customers that come into the funnel
Win rate - deals won v deals lost
Sales cycle length - the length of time it takes to close a deal
Average deal size - the average revenue per closed deal
Number of calls/meetings - the number of calls each sales individual sets-up
Revenue Operations Metrics
Engagement rate - how often a lead engages with a brand or visits a website (as an example)
Cost of acquisition - the amount of money it costs to acquire each customer
Customer lifetime - the length of time a customer continues to pay for a service
Customer lifetime value - The value each customer brings for the time they are a customer
By looking at these metrics rev ops teams, whether their focus is Marketing, Sales or Customer Success, will focus on the customers that bring long-term business value as opposed to those that convert and then leave quickly, which is sometimes the case with target orientated sales teams who look at sales alone and not the broader revenue that each converted sale brings.
Sales operations give sales individuals what they need to do their job, which is simply to sell more. Revenue operations are a new centralized way of thinking and operating which brings together the marketing, sales, and customer success functions to create an efficient commercial engine upon which a business can efficiently grow by turning leads into customers and customers into advocates.