Revenue operations is a relatively new topic, but it’s a hot one.
Over 35% of businesses either already have a RevOps team or are in the process of building one. Plus, Revenue Operations jobs are rapidly increasing. It’s clear that RevOps will become a key component of businesses over the coming years.
But what exactly is it?
Initially, some companies defined it as sales and marketing alignment. Others viewed it as just another word for Sales Operations. But it’s more than that. Way more.
Revenue operations is a strategic and holistic way of thinking about how revenue is generated and all of the teams that it affects.
Old World: Sales and Marketing “Alignment”
For as long as sales and marketing teams have been around, companies understood the importance of aligning the two. After all, when your marketing team spends time and effort acquiring hot leads only to toss them over the wall blindly to your sales team, which effectively has to go in cold, it’s a lose-lose for everyone. More importantly, that disjointed handoff creates a negative customer experience.
But the old way of aligning sales and marketing was very narrow and limited in scope. Many businesses felt that it was enough to get folks in the same room with each other. Or to have regular meetings to discuss goals. Maybe they even designed an SLA. But that’s about as far as it went.
This might all look good from afar, but it’s very surface level. At the end of the day, these agreements and discussions don’t really do much. Old world marketing and sales were still operating day-to-day within their own disconnected silos with their own technology, data and goals.
New World: Revenue Operations
For many businesses, disconnected sales and marketing teams were simply a way of life. It seemed normal, and for a long while, it was good enough. Teams kept working in their own tech stacks, bringing their own reports to the table and spending time trying to match up numbers.
But things are changing. The way customers buy products has fundamentally changed.
Prospects expect a seamless buying experience from the first touch to the final sale, implementation and contract renewal. They don’t want to have to repeat pain points or reshare business goals every time they interact with a new rep or customer success manager. Yet, there are more potential customer touchpoints than ever before.
This landscape has created new challenges, and a new level of coordination and accountability is required. This means data and information must be centralized and shared throughout the entire revenue team to get everyone on the same page and aligned towards the same revenue goals throughout each of those touchpoints.
Revenue operations is the solution. Instead of focusing solely on departmental KPIs, high performing companies harness technology and data to unify, measure and analyze the end-to-end revenue engine. It’s the strategic, organizational shift in aligning revenue teams towards a single goal that encompasses the full customer life cycle.
Revenue operations allows you to:
- Get on the same page around goals, people, processes and data for simplified collaboration and better decision making.
- Drive results by improving visibility to build more pipeline, get more time back and close deals faster.
- Connect signals from sales activity data and customer engagement systems for better visibility, more accurate forecasts and increased predictability.
- Invest and grow with confidence through a culture of transparency, accountability and predictability.
Beyond Sales and Marketing
Sales and marketing are key stakeholders of a revenue operations organization, but they’re not the only ones. Truly connected revenue operations extends to every department and team that impacts the company’s revenue.
With the emergence of SaaS subscription business models, customer success has become a significant driver of revenue. Research shows that 89% of customers switch to a competitor after a poor customer service experience. Yet, over 90% are likely to make repeat purchases after receiving excellent service. This is a huge deal because it can cost you 7x more to acquire a new customer than to retain one you already have.
Whether or not a customer chooses to stick around for another annual contract depends on their experience with your customer success team. Add in the potential for your customer success team to upsell, cross-sell, and lock in renewals, and you can see why they are a key part of your RevOps team.
While the product team might not fit within the core revenue operations organization, they must work closely to ensure a company hits its revenue targets. They often have P&L responsibility for the product lines that drive revenue for the company. They need to know what products are selling well, how quickly new products are adopted by customers and prospects, and how to make the roadmap fit the company’s revenue goals.
Without being in lock-step with RevOps, marketing could be advertising the wrong products. Sales could be discovering in-demand features and not relaying them back. Customer success could be failing to communicate product issues. Or your product team could have a new product that’s collecting dust because no one is marketing or selling it. Product launches directly affect revenue, which is why your product team needs to be intimately involved with RevOps. And the product roadmap affects how marketing prepares their campaigns and how sales forecasts.
Finance might not be a direct driver of revenue, but they monitor performance to ensure the company predictably meets or exceeds the board of directors and/or public market expectations. Whether you’re the CFO of a large public company with hundreds of quota-carrying sellers or a high growth private company, you need to know exactly how your business is tracking and identify where there’s risk and upside in the forecast.
Predictability is everything in business. It determines how organizations hire, plan and make decisions across the entire company. When finance is properly aligned with the rest of the revenue operations team, they make more informed decisions about the budget and investing back in the business knowing the revenue team will hit their numbers.
RevOps Is So Much More
Revenue operations is so much more than just sales and marketing alignment. It is the ability for everyone who impacts revenue to work together with trust and accountability towards a single unified goal. And Clari’s Connected Revenue Operations platform can help you get there. For more information, schedule a demo today.