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Revenue Operations

Revenue Operations: What is it and how does it fit in businesses?

Let’s talk about Revenue Operations (RevOps). Roles for RevOps have sprung up on LinkedIn and job boards. So, it begs the question of what exactly is RevOps and how does it fit in today’s business environment? Is it a repackaging of existing concepts or is it the harbinger of a paradigm shift? Scouring LinkedIn provides clues into the commitment levels companies are making into their advisory and operations teams. Examining the number of search results and followers of relevant hashtags and roles we begin to have a picture across the Go to Market (GTM) landscape.

At the time of this writing, there are the number of followers and search results for the following terms:

  • #marketing: 20,313,762 followers; 53,100,000 people results
  • #sales: 5,840,329 followers; 55,000,000+ people results
  • #salesoperations: 4,142 followers; 139,000 people results
  • #marketingoperations: 2,675 followers; 65,000 people results
  • #revenueoperations: 420 followers; 6,600 people results

Roaring 2020s – An Operations Decade

On the surface, the number of followers to the sales and marketing hashtags are many thousands for every individual Sales (SOPs) or Marketing Operations (MOPs) counterpart. The inequity indicates the growth path SOPs and MOPs are still on. SOPs and MOPs have a long way to go. Meaning, that the jobs of the near future are still in these departments. RevOps would appear to have an even longer horizon.

Companies win when they differentiate and stand out from the crowd. Industries competing for the enhanced performance have long searched for organizational differentiators. They’ve built out “Centers of Excellent”, “Bleeding Edge” technologies, and adopted Automation. All of these changes in an effort to gain an edge over their competition. Taking a page right out of the “S Curve”, late adopters are just now waking up to the benefits of dedicated Sales Operations and Marketing Operations teams. The “right hand’ of the Head of Sales and the Head of Marketing unleashes empirical labor and cost savings paired with enhanced topline productivity.

In the past decade, high technology, finance and healthcare companies held serve with a first movers’ advantage. They were the first to build up SOPs and MOPs functions to help extract the most value out of their newly acquired revenue technologies. And it worked. Industries late to the party can look at several third-party research publications revealing heuristics that well-oiled operations team indicate best at anywhere between 20:1 or 30:1 ratio. That’s one operations team member for every 20 revenue generators. Anything above that ratio will place incredible strain on the Ops function. Call it burnout in full effect.

The Arms Race

The rise of the CMO and the CRO gave rise to the formal role of Sales and Marketing Operations. Demands on both marketing and sales increased.

For sales leaders, the responsibilities grew exponentially, including:

  • Organizational design
  • Territory building
  • Compensation wrangling
  • Role specialization
  • Technology adoption, optimization, and integration

Marketing leaders also faced similar burdens such as:

  • Omnichannel content publication: rise of digital over analog
  • Incorporating web and mobile technologies
  • Boosting attribution signals on prospect data
  • Role specialization
  • Technology adoption, optimization, and integration

Enter the Sales Operations and the Marketing Operations professional. Their arrival marked the official load sharing of all the responsibilities listed and more. CROs and CMOs were able to merge a blend of hard skills and functional acumen under one umbrella. No more playing the “telephone game” with the CIO and IT departments. System Administration and Process Development could live in their own department. Development sped up rapidly.

Missiles Operating in Silos, Who Turns the Key

Years into this grand experiment we have seen best practices emerged.

Qualified Pipeline from marketing teams are deconstructed down to an exact science. Digital search and paid ads are tracked seamlessly into marketing automation platforms. Each prospect tied to specific campaigns or to a multitude of different campaigns. The journey of a customer is no longer a binary fountainhead but a multithreaded softening of the ground. Marketing departments can establish an understanding of prospects long before sales reps even reach out.

Pipeline execution by sales teams can multithread into accounts. Delivering relevant and personalized content payloads into email, video, and SMS to their prospect. Customers would be hard pressed to accidentally ignore the messaging. Sales reps could skip to the next call seamlessly because their conversations are recorded, transcribed, and auto-magically captured in the right places at the right time.

Over time it became apparent the efficiencies gained within each function led to deep understanding of fundamental concepts such as conversion rates and win rates. Far too often each department head talked about the same concept but arrived with a different set of metrics. CEOs and CFOs found it difficult to operate because the “language of revenue” quickly broken down into “translation sessions” of “KPI dialects”.

The calls for alignment become deafening.

Revenue Operations is an old concept, but a new organizational structure

Focus, alignment, simplicity, and teamwork. Four key principles that drive the need for Revenue Operations. Focus in the sense that customers are not raw materials going through an industrial process, where they start off as a raw lead and move their way down the revenue factory line until they become a qualified opportunity. Rather, prospects are simply looking to make a purchasing decision with the help of marketing and sales. Alignment helps get all leaders on the same page, establishes shared outcomes and an understanding of how their processes and programs will contribute. Reducing silos will greatly simplify everything from reducing systems redundancy, paying down technical debt, and reusing pre-existing work. RevOps views revenue as an outcome of teamwork across a number of different role specialists.

The Head of Revenue Operations is best suited as the right-hand person of the CRO and/or the CMO. SOPs and MOPs have considerable functional, tribal knowledge that can be unleashed in a greater context across the business. Instead of taking direction solely from their functional leaders, they are now taking requests from all GTM departments. RevOps can then prioritize all projects in the context of what’s needed for the business as a whole. Marketing does not get to eat first. Sales does not get to cut in the front of the line. Customer Success does not get to sneak in additional requests. The customer comes first, not the departments.

Is it time for RevOps today?

Two scenarios that make sense for RevOps is the early Series A/B startup and the large-scale company. Startups looking for a value play would benefit from a RevOps team that can build their way to $25M in revenue. At these levels the GTM leaders do not yet have large staffs. Information flows seamlessly from top to bottom and back again. Information loss is not as egregious. RevOps can come in to build and support from a tightly knit core. Larger companies with deep silos and significant information loss need more of a Program Management Office (PMO) type of RevOps organization. Under this configuration, RevOps would be an overlay type of organization with specialists deployed to each GTM department. The primary goal is to manage an entire program composed of projects from each department.

If you’re considering if RevOps is right for you it would help to perform a few assessments:

  • Are we spending less time executing our strategy because of KPI dialects?
  • Are we small enough that we could build up our Operations function from a centralized team?
  • Are we large enough that it feels we are celebrating marketing wins over sales wins and vice versa? Rather than having an end to end view of our business.

A clear affirmation to any of the assessments above may indicate it’s time to consider a Revenue Operations function. In this instance, the Revenue Operation organization would be its own independent department outside of Marketing, Sales. Much like “the office of the CEO”, the Revenue Operations group would be “the office of the CRO”.

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