Revenue Operations
Every company in the world has the objective to
- provide services or products to customers
- to generate the largest possible turnover.
These two goals are inextricably linked: you cannot generate turnover without selling something to customers, and as soon as you sell something, turnover is inevitably the result. Of course, we are not talking about the size of that turnover, only that it is there for sure.
At some point, of course, that turnover has to be high enough, otherwise your business cannot survive. As your organization grows and wants to do business more sustainably, simply generating turnover is no longer enough. Optimization and predictability also come into play. That is what RevOps, or Revenue Operations, is all about.
In this blog post, we will talk about what RevOps exactly is, and how it differs from sales and marketing alignment.
What is RevOps or Revenue Operations?
You will read different definitions here and there, and they will all say mostly the same thing. We will give it a try here too:
RevOps is the entirety of actions in which you structure and organise resources (people and means), data and processes in such a way that they generate revenue, optimise it and make it predictable.
It may still be vague, but RevOps is a fairly broad concept that can include many concrete actions. The appointment of a customer success manager, for example, can fall under RevOps. In a diagram, this looks like this:
So RevOps is much more than just doing sales or marketing really well. It is a broad concept that covers many aspects of your organization (like customer experience, sales meetings, marketing, delivery, repairs, or customer service). It is a strategic alignment across departments so that all your employees, processes, and data contribute to an optimal turnover AND a fantastic customer experience in the different phases of the buyer journey.
More than sales and marketing alignment
Don’t get us wrong: aligning sales and marketing is good, and even necessary if you ask us. Sales and marketing are departments that have each lived on their island for way too long. Aligning them has been best practice for several years now, and certainly contributes to the bottom line of your organization.
But RevOps goes further. More departments or business units in your organization have an impact on turnover, directly or indirectly. Think of customer service that has to deal with complaints or questions, or your technicians who have to deliver the sold services. If they deliver poor services, you will have dissatisfied customers who will eventually buy elsewhere.
Customer retention is therefore also of strategic importance for your organization. If too little attention is paid to this, your turnover will be reduced. Furthermore, aligning teams is not a goal in itself. It is the result of all the optimizations you make in the areas of people, resources, and processes.
De impact van RevOps op je north star KPI's
Your ‘north star’ metrics are indicators of long-term success, more than just KPIs. For example, a number like the number of demos that convert to a paid account each week is such an indicator. And while monthly recurring revenue is also an interesting metric, this is mostly historical data that doesn’t say much about future success.
A ‘north star’ metric must meet 4 conditions:
- it must measure progress
- It must demonstrate customer value
- it must lead to revenues
- It must reconcile historical data with future potential
RevOps has a direct impact on this. Revenue is the most important north star metric in the vast majority of cases. Research shows that companies with a strategy for improving their revenue operations saw, on average, 36% more growth than other companies. Listed companies with a RevOps strategy see their share price go 71% higher than their competitors without a RevOps strategy.
Revenue is therefore your most important metric, and it also determines your other North Star metrics. After all, it is the price customers pay for the value they get out of your products or services. It is therefore crucial to be able to deliver sufficient value.
RevOps for better customer experience
As we said, RevOps aims not only to generate revenue but also to serve customers. Whether it is products or services, your customer expects something in return. Your processes should be set up in such a way that they provide as much value to customers as possible. Revenue Operations that do not take into account the customer experience are short-sighted and will never deliver long-term success.
Because RevOps is not just about maximizing revenue or optimizing your organization’s sales processes. It is also about maximizing upsell and cross-sell opportunities and increasing the renewal rate of your existing customers. This makes your turnover more predictable. Developing RevOps in your organization means looking at deals from the point of view of that potential customer.
Starting with RevOps
Revenue Operations is not something you just set up quickly. To achieve these goals, you have to handle it strategically and systematically. You need to improve your customer’s experience with your organization. You do this by getting to know your customers through and through, mapping out their customer journey, and optimizing the processes around it. Your buyer personas play a major role here, too.
Revenue Operations is therefore not only the responsibility of Sales and Marketing but also of your other teams. If all these people and processes are well coordinated, you can speak of a flywheel with little or no friction. Then you deliver top experiences to your customers and maximize your turnover.
You can follow these steps to get started:
- Audit your current processes, tools, and results
- Define which stakeholders should be involved
- Define KPIs for your teams and the entire organization
- Choose the tools that can help you achieve your RevOps goals
- Create Service Level Agreements throughout your organization
There might be some resistance to RevOps at first. It takes time and energy and results will not be there on day 1. Communication and discipline are crucial to make your RevOps a success.
Do you want more statistics about the impact of RevOps on your organization, or do you want to know in concrete terms how this will work for your organization? In the meantime, we wish you a healthy turnover, and until the next blog post!