Neil Patel

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The Holistic Guide to Revenue Operations

A graphic saying "The holistic guide to revenue operations"

When you operate a business, all the different departments must work in perfect harmony.

After all, you don’t want your sales team undoing all the hard work your marketing team is doing or vice versa, right?

The great thing about a revenue operations (or RevOps) model is that it brings all the departments that generate revenue together. This means everyone is working towards the same goal of making more money!

New to the world of revenue ops? I’ve put this revenue operations playbook together just for you. Together, we’ll look at how to build a revenue operations framework, some RevOps best practices, and which metrics to review.

What Is Revenue Operations and How Does It Work?

A diagram explaining how RevOps works

Revenue ops is all about managing all the different teams that contribute towards generating revenue and ensuring they all work together towards a unified goal. As a general rule, three main departments are involved in the RevOps process:

  • Marketing
  • Sales
  • Customer service and success

However, depending on what products and services you sell and how your business is structured, other departments, like finance, operations, and IT, might be involved too. As long as these departments directly contribute to the revenue process, they’re part of your revenue operations framework.

Still not sure how RevOps works? Let’s break it down a little.

Imagine you work in a restaurant. Your marketing is the menu that entices people to visit, your sales team are the serving staff encouraging people to place orders, and your customer service team are the sous chefs making meals to keep customers happy.

RevOps is the head chef who coordinates and optimizes the entire kitchen and restaurant. RevOps ensures everyone works together, processes are super-efficient, and the meals that go out are as delicious as possible.

This means more meals sold, more satisfied customers, and more revenue.

What Do RevOps Teams Do to Increase Revenue?

Revenue operations teams help break down departmental silos and improve processes to increase business revenue. Some revenue operations responsibilities include:

  • Identifying existing processes and how they can be made more efficient.
  • Looking at data and insights to identify patterns and trends.
  • Implementing new technologies to streamline workflows and increase efficiency.
  • Reviewing changes made and tracking key metrics.

For example, let’s say that the RevOps team has identified that customer churn is too high. They may:

  • Reassess the existing marketing channels to make sure marketing is targeting the right people.
  • Implement a new onboarding process to keep new customers happy.
  • Encourage the customer service team to proactively contact customers to identify issues before they escalate.

Why Revenue Operations Is Getting More Popular

Revenue operations is a modern phenomenon. Before then, sales, marketing, and customer service teams typically worked independently of one another. This led to duplication of work, an increased risk of errors, and an inconsistent customer experience.

For example, sales, marketing, and customer services may have had their own individual spreadsheets to log leads, inquiries, and opportunities.

RevOps provides a more holistic approach to the customer process where all departments share the same goals and processes. This means less time focusing on administration and fixing mistakes and more time generating revenue.

Diagrams showing the relationship between departments before and after RevOps
Diagrams showing the relationship between departments before and after RevOps

So, rather than having three different spreadsheets with potentially conflicting information, sales, marketing, and customer services all use one customer relationship management (CRM) system.

Monday.com's sales CRM system.

Multiple teams can use one CRM to manage customer contact details, log sales and marketing touchpoints, and when customers have contacted customer services. This means data is always accurate, doesn’t have to be entered multiple times, and everyone who needs the data can access it.

According to Sonar, 60 percent of companies have a formally defined RevOps function, and this figure is growing all the time.

The Role of Digital Marketing in Revenue Operations

Digital marketing is a big part of revenue operations. RevOps uses the data available from pre-existing marketing channels, looking at what changes it can make to optimize revenue generation.

Say, for example, you have an email marketing list in place for your business. RevOps might segment the email list into categories using the data available. For example, they may split the list into customers that haven’t bought from the business and customers that have bought from the business.

Revenue operations can then send targeted emails to each segment to increase engagement and the odds of a sale.

Segment menu in Mailchimp

Is Your Business a Good Candidate for Revenue Operations?

All businesses can take advantage of RevOps to increase efficiency and grow revenue. However, some businesses are better suited to a revenue operations framework than others.

While revenue operations bring great results, you must invest time, money, and resources into getting it right.

In my experience, the following types of organizations can benefit most from a revenue operations framework.

  • Businesses that are rapidly growing. When you need to scale quickly and efficiently, RevOps can help you ensure everyone is working towards the same goals.
  • Businesses with complex sales cycles. When you have a complex sales cycle, you may deal with multiple stakeholders and wait months or years to close a deal. Revenue operations identify ways to speed up the process and save time by automating tasks.
  • Businesses that sell a range of products or services. When you sell a range of products and services, you’ll have many marketing channels to manage and different customers to nurture. RevOps makes it easier to track and segment customers for the best results.
  • Businesses with an international customer base. When you sell globally, you must provide an excellent customer experience for people across different countries. Revenue operations can automate processes and optimize global marketing campaigns for conversions.
  • Businesses with high customer churn. When customer churn is high, RevOps can use existing data and customer feedback to identify ways to retain customers and keep them happy.

Benefits of a Strong Revenue Operations Program

So, what benefits are there to aligning your sales, marketing, and customer service teams?

  • More revenue. RevOps helps sales teams identify bottlenecks in the sales pipeline and look at ways to shorten the sales cycle. According to Revenue.io, 13 percent of companies that implement RevOps see increased revenue growth.
  • Happier customers. Revenue operations looks at ways to improve the customer journey. This leads to more loyal customers and reduced churn. More satisfied customers are 87 percent more likely to upgrade and buy new services.
  • Lower costs. Where there might be an initial outlay to implement revenue ops technology, you can make savings in the long term. RevOps looks at the entire sales funnel to see where it can make cost-saving efficiencies.
  • Boosted efficiency. Revenue operations helps automate basic tasks and determines where work is being duplicated. This means less time spent on tedious tasks and more time to focus on strategic work. Given that sales reps only spend 28 percent of their week selling, this can mean a lot more time for lead generation.
  • Improved decision-making. RevOps can mean better decision-making. This is because there is more transparency and collaboration between different teams, meaning decisions are made that benefit everyone.

How to Implement Revenue Operations Plans

So, you know you want to implement a revenue operations framework in your business. But how do you do it?

Here are three simple steps to get started.

Get Buy-In from Your Leadership Team

RevOps works best when everyone in your business knows it’s in place. Even if they’re not directly involved in revenue generation, they can offer support and services when needed.

This is why getting buy-in from your leadership team is so important. Your leadership team are integral in securing the resources you need to succeed, as well as helping get other departments on board.

Break Down Silos

A silo occurs in your business when specific departments keep to themselves and don’t interact with other departments. This means teams don’t know what’s happening outside their department. Not only this, but key information and documentation are locked down.

According to Venturebeat, silos can cause employees to lose 12 hours a week chasing data that they should otherwise have free access to.

For RevOps to work, it’s vital to get rid of any silos and encourage cross-functional working. You can do this by:

  • Making it easier for employees to collaborate and share ideas.
  • Ensuring all employees are working towards the same goals.
  • Encouraging job shadowing so different departments understand each other.
  • Reviewing data on servers and making sure all the relevant people can access the files they need.
  • Rewarding and recognizing collaboration.

Identify Goals

A critical part of revenue operations success is ensuring that all departments share the same goals.

This doesn’t just create a sense of direction but also aligns efforts and makes working together easier. If you all want to achieve the same thing, it makes more sense to collaborate!

I’ll talk you through some of the best revenue operations metrics later in this post.

Best Practices for a Revenue Operations Strategy

Revenue ops is all about shifting from a revenue extraction model of business to a value creation model.

What does this mean? It means moving from a model focused wholly on getting as much money from your customers as possible to providing them with as much value as possible.

This means happier, loyal customers who stay with your business longer. Repeat customers that spend 67 percent more than brand-new customers!

If you’re looking to move to a RevOps model, here’s what you need to know about revenue operations best practices.

Start Small

I recommend starting small when launching RevOps in your business. Identify a small issue that revenue operations can help solve and use it as a trial. If it’s successful, you can roll RevOps out on a larger scale. Starting small is also a brilliant way to get support from your leadership team.

For example, you could move some of your most frequently used documents to a cloud platform like Google Drive, so it’s easier for staff to view data and collaborate on projects.

Invest in the Right Tools and Resources

To do RevOps right, you need the right stack of tools. These tools can automate repetitive tasks, make it easier to monitor data, and means everyone can access the same information.

Which tools and resources should you invest in? It depends on your goals and the industry you’re in.

Alt text: Bar chart showing which RevOps technologies businesses are using.

Over half of RevOps teams take advantage of a sales engagement platform. A sales engagement platform (like a CRM) measures customer touchpoints, automates selling actions, and makes it easy to qualify leads.

The tools you choose for your RevOps stack will depend on your industry, goals, and budget. I always recommend reading customer reviews on tools to get objective feedback. Alternatively, many RevOps tools have free trials, so you can try before you buy.

Be Patient

Finally, implementing a solid revenue operations strategy for your business takes time.

In my experience, it can take 18 to 24 months from assessment to implementation, especially if you have to collate and migrate your data to new platforms.

Identify which areas you want to prioritize and take it from there. The results will be well worth the wait!

KPIs for Revenue Operations

It’s essential to see how your RevOps team is performing and how much money you earn as a business. You can do this by measuring the right revenue operations metrics.

Quality is always better than quantity when it comes to KPIs. It’s best to carefully track two or three metrics that are highly relevant to your business rather than ten or twenty metrics that you don’t do anything with.

If you’re not sure which revenue operations metrics to measure, here are some ideas to get you started:

  • Revenue growth rate. This is the percentage your revenue has increased over a period of time. This is an easy metric to measure and a good yardstick for measuring how your RevOps efforts are paying off.
  • Sales conversion rate. This is the percentage of leads that convert into paying customers. This is an excellent metric to determine the effectiveness of your sales process.
  • Sales velocity. This is how long it takes for a prospect to go from a lead to a paying customer. While your sales velocity will depend on the product or service you sell and the industry you’re in, you want this number to be as low as possible.
  • Customer churn rate. This is the number of customers that stop using your product or service over a period of time. It’s a good way of measuring customer satisfaction as well as if you’ve implemented any measures that customers don’t like
  • Customer lifetime value. Often referred to as CLV or CLTV, this is the average revenue you can expect from a customer during their relationship with you. This is an effective way to monitor customer loyalty.
  • Customer acquisition cost. Referred to as CAC, this is the average cost of acquiring a new customer and is a great way to measure how efficient your digital marketing channels are.

Remember that it’s vital that all revenue operations KPIs you measure are SMART:

Diagram detailing what you should include when identifying SMART metrics
  • Specific. Ensure your goal is narrow rather than broad, as this will be easier to achieve and monitor.
  • Measurable. Make sure your goal is quantifiable and trackable.
  • Attainable. Ensure your goal is something you can reasonably accomplish; you don’t want to set yourself up to fail.
  • Relevant. Make sure your goal fits into your overall business strategy. Think about the big picture!
  • TimeBased. Ensure you set a deadline to achieve your goal by.

Common Revenue Operations Challenges

RevOps sounds easy on paper, but it can be challenging to set up, manage and maintain.

Here are some of the main issues you might experience and how to resolve them:

  • Getting approval from leadership. This can be hard, especially if your leadership team is more “old school” and sees no issues with how they’re running things. Education about the benefits is vital. Most leadership teams are all about the “bottom line,” so talk about costs and the quantifiable benefits of Rev-ops.
  • Organizational silos. Breaking down silos in your organization can be tricky, especially if they’ve always been there. The best way to break down silos is to get leadership buy-in so you have the authority to make changes.
  • Misalignment between departments. Different goals and objectives can lead to wasted time and mistakes. A revenue operations strategy can identify shared metrics and provide a blueprint as to how departments can collaborate together.

FAQs

What is Revenue Operations?

Revenue operations, or RevOps, involves aligning the teams involved in revenue generation, including sales, marketing, and customer services. By encouraging these teams to work closely and optimizing their processes, RevOps can lead to increased business revenue.

What RevOps Roles Can You Expect to See in a Business?

Some of the revenue operations roles you can see in a business that utilizes RevOps include:
Revenue operations manager
Sales operations manager
Marketing operations manager
Customer success manager
Revenue operations specialist
RevOps analyst
Not all companies will have all of these roles. It depends on the size of the business, the industry it is in, and the existing business model.

Conclusion

Revenue operations is absolutely massive at the moment. If you’re not already using it, you’ll likely use it in the future to ensure your sales, marketing, and customer service teams are all aligned in perfect unison.

In fact, Gartner predicts that three-quarters of the biggest companies in the world will be using a RevOps model by 2025!

The key to a good RevOps strategy is planning. Understand what you want to achieve, identify your goals, and get buy-in from your leadership team. This gives you a good solid foundation to build your revenue operations framework.

What do you think of RevOps? Are you using it at the moment? Do you plan to use it in 2024? Let me know your thoughts in the comments!

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