Revenue Operations

What is Revenue Operations?

Adam Lynch
Adam Lynch
March 27, 2020
·
12 minute read

The term revenue operations has emerged over the past couple of years as a way to describe all customer facing commercial aspects of a business:


“Revenue Operations is the alignment of marketing, sales and customer support operations across the full customer life-cycle to drive growth through operational efficiency where all commercially focussed teams are accountable for revenue.”

Revenue Operations (Rev Ops) has been enabled by the proliferation of access to data, the application of efficient processes and the availability of Martech tools. However, the important factor for Rev Ops is that it is a strategic approach to aligning individual roles with business focussed target objectives, therefore ensuring a combined goal for all commercial team members.

This focus has been led by the emergence of the subscription economy where what happens after the sale is just as, if not more, important than before the sale. According to Zoura, the subscription e-commerce market has grown 300% in the past seven years whilst Gartner are predicting that 75% of business selling to consumers have considered offering subscription services.

Customer Expectations

The focus on Rev Ops has been developed out of the need to match and deliver upon a customer’s expectations driven by modern and coherent online and offline experiences that businesses offer today.  Customers can undertake their own research on every product or service purchase they make today, giving them control over how they consume, select and interact with brands. 

Through a coherent and planned Rev Ops framework businesses can deliver messaging, communications and interactions with customers in a data-driven, personal and proactive way. Thus, turning them into brand advocates and not simply considering them as a record in a CRM or number in a sales pipeline. Rev Ops leads and supports a consultative approach to customer acquisition and retention where teams can support prospects and customers through their journey rather than driving a hard sale.

Alignment and Accountability

The operational benefit of a correctly implemented Rev Ops approach is alignment of people from different operational divisions, Marketing, Sales and Customer Success all taking responsibility and accountability for revenue growth. This is achieved through the implementation of processes, operational workflows and, importantly, the selection of carefully considered tech stack to ensure data and customer information flows seamlessly between teams.

Automation and the connection of tools is a key enabler for a well-oiled and efficient commercial operation.  It’s unlikely that one tool will fit all of a business's needs, indeed, it’s important that you can be flexible enough to use the right tool for the right job at the right time - you just can’t leave it to live in it’s own silo.

Success Metrics and Analytics

So what are the key measurements of success for a Rev Ops team? It does, of course, depend on the the type and sector of the business, but it could include bookings, customer acquisition, monthly recurring revenue, billings, customer churn rate and customer satisfaction.  

The important factor is that each business and Rev Ops team identifies these key metrics and ensures that each operational division and team members have full visibility over their performance metrics.  The selection of the right analytics tools are therefore an important part of a Rev Ops framework.

The well known OKRs framework also combines with the Rev Ops philosophy to help with the alignment of goals from a business level, to each divisional team, to each individual team member.


The Revenue Operations Flywheel

A key element of our approach to Rev Ops is the focus on a commercial cycle rather than the normal sales funnel.

Using this RevOps framework, the customer becomes the center of all commercial operations while simultaneously aligning marketing, sales and customer success with the customer lifecycle. Through this alignment, teams have greater visibility into the whole purchasing journey and are able to more efficiently bring in new business and maximize the value of existing customers.

When compared to the traditional linear customer journey, the difference becomes clear:

Using the flywheel method, all three teams are unified into one, breaking down the siloes that prevented efficient handoff from marketing to sales to customer success. With all three teams now working toward a common goal (revenue), their contributions to growth become greater than the sums of their parts.

How does the RevOps flywheel framework impact each commercial function?

Marketing in the Revenue Operations Flywheel

In the RevOps flywheel, marketing’s role in commercial operations expands from generating traffic and bringing in new leads to include supporting for sales in closing new prospects and customer success in increasing the value of existing customers.

Using data and input from sales and customer success, marketing creates the messaging and content that a brand’s audience finds helpful and useful with the goal of accelerating the sales process and engaging existing customers with the brand.

Sales in the Revenue Operations Flywheel

Similar to the marketing team, sales operations in the RevOps flywheel is now involved in the earliest and latest stages of the customer journey. Sales works in conjunction with marketing to plan campaigns by providing input on audiences to target, messaging to deliver and prospect questions to be answered.

In the RevOps flywheel, sales aligns with customer success agents to increase the revenue generated by existing customers through more effective cross-selling and up-selling. 

Customer Success in the Revenue Operations Flywheel

A business’ customer operations is one of the most important teams when it comes to creating steady, reliable revenue growth.

The customer teams with marketing and sales operations to provide crucial data about a business’ customers. As we touched on above, this customer success data allows marketing to attract more relevant website traffic and generate more qualified leads 

This internal data also helps sales executives to better create better profiles to close more prospects while at the same time allowing for better identification of opportunities for up-selling new and existing customers.

Within this flywheel framework, the customer team analyzes the entire customer lifecycle to identify the key decisions and interactions that cause customers to either renew or cancel their accounts. This customer success analysis gives a business’ marketing team a basis for ongoing customer marketing to not only prevent churn, but to transform customers into valuable advocates. 

This, in turn, makes marketing and sales processes easier and more efficient.

In short, customer operations is an important factor in powering the RevOps flywheel, transforming the customer journey from a linear funnel of lead to prospect to purchase into an ongoing engaged relationship that maximizes customer lifetime value.

Problems Solved by Revenue Operations

In our experience, when a company is able to fully align its revenue operations, the benefits unlock solutions to the problems preventing it realizing all of its growth potential. Improved team alignment, integrated tech stacks and increased accountability the revenue operations framework helps bring about gives companies a leg up in overcoming their greatest challenges.

Disjointed teams

As we covered when discussing the RevOps flywheel, many go-to-market teams operate within their own siloes. Without revenue operations, the typical org chart uses a structure much like this:



Each team reports into its own leadership which, depending on just how large the organization is, reports into senior management or C-suite executives. And while there might be some collaboration between teams, they remain within their own siloes with a limited picture (and impact) of overall revenue performance.

Switching teams to the much more integrated RevOps structure breaks these siloes by centering each team around the business’ full customer journey and ensuring everyone is working with the same data provided through an integrated technology platform.

With RevOps, gone are the days of marketing, sales and customer success teams all working with different priorities or trying to move in different directions without the ability to see the whole picture.

Disconnected or unoptimized tech stack

It’s quite natural that, over the years, a business buys several different tools and technology solutions as needs arise. These tools often don’t easily connect with each other, if they connect at all. So you end up with marketing unable to easily see which channel brings in the best converting leads while sales teams don’t know which types of deals result in the longest customer lifetimes.  

The problem is only compounded when a business starts adding more and more technology in an attempt to fill in these gaps. 

The result is usually an unstable and messy tech stack prone to glitches and unreliable data. Even worse, these platforms are expensive to set up and maintain as they require specialized knowledge of each technology.

Streamlining technology and using only tools that are purpose-built is one of the fundamental points of the revenue operations process. In fact, step one of revenue operations implementation involves a detailed technology audit with an eye to understanding your exact technology needs.

With this audit in hand, businesses are then able to move forward with a simplified platform using only the tools that meet the specific needs of their entire revenue team. 

The end result is higher revenue through increased efficiency and better data as well as a more reliable and cheaper technology stack.

Unhappy customers and high churn

If a business suffers from issues surrounding disjointed teams and disconnected tech stacks, it almost certainly has problems with its customer satisfaction scores and churn rate.  

When marketing, sales and customer success teams aren’t properly aligned, customers will often receive different, competing messages at each conversion point in the customer journey. 

  • Marketing campaigns promote a certain offer or discount to leads
  • Sales teams promise capabilities to prospects that may or may not be possible
  • Customer success teams have to try to effectively onboard and retain customers that may not receive the price or features they were expecting. 

As expected, this system results in unhappy customers that don’t stay customers long. 

By properly aligning revenue teams around the full journey, revenue operations is able to prevent this situation from arising. Customers now receive the same message from each touch point while their needs are heard and addressed throughout the entire company.

These happier customers not only stay longer and provide a higher customer lifetime value, they are also much more likely to convert into advocates and promoters for the business.

Unpredictable or stagnant growth

Disjointed teams, unoptimized tech stacks and unhappy customers all combine to limit a business’ potential for growth and profitability. In fact, only around 10% of companies are able to achieve consistent and predictable revenue growth. 

Because revenue operations connects reams with more consistent and reliable measurements, businesses that use it transform their teams into a well-oiled revenue engine. Better data and team alignment results in consistent growth and better strategies. 

What’s more, synchronized teams are able respond to changes in the business or market faster and more effectively, reducing negative impacts and making the most of new opportunities in even the most uncertain economic climates.

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