Revenue operations: What is it and why it matters

What is revenue operations?

Revenue Operations (RevOps) is the engine of your business that keeps sales, marketing, and customer success aligned and running efficiently. According to research by SiriusDecision, companies that align all go-to-market functions outperform those that don't, seeing 15% more profits and 19% faster growth.

RevOps have the pulse on the business. They help the different departments to make better decisions with data-driven insights and recommendations. They implement tools to maximize results and ensure the infrastructure is working seamlessly across all tools/systems. Companies with aligned departments close 38% more deals and post 208% more marketing revenue, according to HubSpot reports.‍

RevOps play a vital role in the business's overall strategy by analyzing insights and trends from data to produce recommendations to help leadership make informed and educated decisions.‍

Revenue Operations is the key to the growth and success of your company.

Revenue operations vs. sales operations

Revenue Operations' core mission is to drive alignment and performance across each department to increase overall revenue growth. RevOps is the strategic convergence of sales, marketing, and customer success.

Whereas Sales Operations is about managing processes and systems. Their focus is on the structures, processes, and technologies that maximize the sales team’s potential. Sales Ops reduces friction in your sales process, so your sales team is more productive and successful.

Sales Ops is about creating efficiency, specifically in sales. Whereas RevOps is about creating efficiency across the entire organization.

“The easiest way to understand how companies view the difference between Sales and Revenue Operations is by looking at their job postings. A typical Sales Operations job requirements will focus on many tactical procedures such as commission tracking, territory mapping, and forecasting. Revenue Operations job descriptions have tended to skew more towards strategy and analytics; leveraging business intelligence and process analysis to drive iterative improvements across the customer journey.”

-Matt Johnston, Revenue Operations Manager at LeadIQ.

Revenue operations responsibilities

RevOps has four main areas they're responsible for:

Operations management

Operations management creates the highest level of efficiency possible within an organization. Operations management work across micro and macro levels to deliver strategic business objectives.

Enablement

Enablement is the process by which you acquire and maintain customers, maximizing revenue gained through each stage of a customer’s journey by focusing on the delivery of great customer experiences. Enablement is responsible for making sure the sales, marketing, and customer success teams are properly aligned.

Insights

Provides day-to-day insights as well as long-term strategic analysis based on data across all departments. These insights are used to give your company confidence in the decisions that they’re making.

Tech stack

RevOps is responsible for selecting and assisting in implementing all technology used across Marketing, Sales, and Customer Success. As well as setting periodic goals/criteria to access the current tools to see if they are adding value or not.

Revenue operations key metrics

Metrics that your RevOps team track vary depending on the stage of the business. The metrics you choose to track should align with your current company goals. However, it is important always to keep growth potential on your radar and look at your upsells, renewals, and churn.

The value RevOps holds around metrics is in the sense of providing insights. The RevOps department is the closest to the data, the systems, and the day-to-day operations on what's happening behind the scenes of the company. The data shows what trends are occurring and what business decisions the company should be making.

Some suggested key metrics to track include:

• Win rates
• Customer acquisition cost
• Annual recurring revenue
• Customer lifetime value
• Forecast accuracy
• Pipeline velocity
• Sales cycle time

Win rates

The number of closed opportunities that you won. Win rate tells you the success rate of your sales team.

Customer acquisition cost (CAC)

The total cost of sales and marketing efforts needed to acquire a customer. CAC is one of the defining factors in whether your company has a viable business model that can yield profits by keeping acquisition costs low as you scale.

Annual recurring revenue (ARR)

The metric of expected generated revenue by customers for providing them with products or services within a year. This is primarily used by businesses operating on a subscription-based model.

Customer lifetime value (LTV)

The amount of value you receive from your average customer over your relationship's entire duration. This is important for understanding when setting and measuring goals is necessary for your business.

Forecast accuracy

According to Hubspot, "a sales forecast predicts what a salesperson, team, or company will sell weekly, monthly, quarterly, or annually." Forecasts are important because they help your organization make better decisions regarding planning, budgeting, and risk management. Forecast accuracy is essentially how close you come actually to hit your projected forecast.

Pipeline velocity

The speed by which leads move through your pipeline, whether they are won or lost

Sales cycle time

The average duration of time (typically in days) takes your team to win a deal. Your sales cycle is the sum of all the durations within each opportunity stage in your pipeline.

"There's a ton of different metrics - like probably a list of maybe 30 or 40 off the top of my head. But I think the big one is paying attention to bringing in those new customers and keeping them. As well as trying to expand within that customer base".

- Rosalyn Santa Elena, Head of Revenue Operations at Clari.

Choosing tools for your tech stack

RevOps provides solutions for all departments by finding the perfect stack to allow fewer clicks, fewer steps, have automation integration, and then help things be repeatable and scalable.

When deciding on tools to implement across your company, the most important thing to be concerned with is not the specific names of the vendors you are using but rather to ensure that all the systems can effectively work alongside one another.

Many great tools can get the job done; we could write an entire blog post on that alone. The important thing to note is that you want to make sure that the tools you choose allow your data to flow seamlessly through the various systems.

One of the biggest challenges from a RevOps perspective is when systems/tools do not talk to each other. You may have great information in one system, but your infrastructure is flawed if it does not translate downstream to the others. You want all your tools to be integrated and speak to each other to avoid manually exporting data from one system and then importing it elsewhere.

Wrap up

Revenue Operations creates a fundamental shift in how most B2B organizations are aligning themselves to drive growth. Both the tactical and strategic hats you put on when looking through a revenue operations lens are essential. The tactical pieces have to be completed and offer an important piece to the puzzle, but the real value lies in the strategic outlook.

For companies that are adopting Revenue Operations strategies, nearly 29% have somewhat centralized operations, and 17% are fully centralized. Implementing a Revenue Operations strategy is the best way to ensure your customer lifecycle is optimized to its fullest ability.

Although revenue growth remains an ongoing challenge, with proper internal alignment, it is achievable. RevOps are the engine of any business with the power to exceed growth and performance goals.