What is a Revenue Operations Strategy?
A RevOps strategy is a plan for optimizing marketing, sales and service performance to drive more revenue. This could take many forms, but the most common (and effective) method is to map out the ideal buyer journey and create a strategy that outlines how people, processes and technology will have to change to make it a reality.
This is important because most companies have actually never explicitly considered their end-to-end processes. Sales, marketing and service each build processes that serve their specific purposes. But the way those processes connect, how the departments serve each other, and how this ultimately impacts revenue is difficult to conceptualize from within a single department.
A good RevOps strategy should include:
- Analysis of the existing buyer journey
- Analysis of the existing tech stack
- A map of your ideal buyer process
- A list of actions that are needed to create that buyer process
- A timeline for the implementation of those actions
What is a RevOps Team?
A RevOps team is a group that is responsible for creating and implementing a company’s RevOps strategy. This could be made up of individuals from marketing, sales, service and IT, or it could comprise individuals who specialize in RevOps.
A RevOps team shares many features with an IT or Analytics team, as both require technical knowledge and data analytics skills. However, a RevOps team also needs to contain several unique skills, including:
- Expert knowledge of marketing, sales and service processes
- Communication skills to navigate challenging situations
- A deep understanding of the principles of RevOps and its ultimate function
What Makes an Effective RevOps Team?
RevOps is still an emerging discipline, and different companies will create different sub-roles within their RevOps team. Equally, the scope of a RevOps function will vary greatly depending on the size of an organization. Many smaller organizations may have a single individual responsible for the entire function - and RevOps may not even be their full-time role, while an enterprise could have multiple team members.
Regardless of these differences, a few principles apply to any RevOps team. They need to have:
- Clearly defined responsibilities in order to function smoothly and prioritize tasks
- Accountability based on defined roles and KPIs
- Consistency to ensure RevOps is an ‘always on’ function
It is also important to include people who believe in what RevOps is trying to achieve. The RevOps team will inevitably encounter resistance, and they need to be able to push through and evangelize for the cause.
What Tasks Does Revenue Operations Involve?
RevOps teams are responsible for a number of concrete tasks, such as:
- Managing reports and performance data
- Automating manual processes
- Creating and running regular catch-ups and performance evaluations
- Researching and implementing new technology
- Managing the RevOps systems
The Role of Technology in RevOps
Data is at the heart of most RevOps activities, which makes technology an essential component of the function. RevOps teams spend much of their time evaluating, managing and implementing software and tools that improve management of the pipeline.
There is an enormous market for such software; the global market for Customer Relationship Management (CRM) software alone was worth nearly $64 billion last year. But the size and complexity of the market can actually be an impediment, as it makes choosing a solution more time-consuming than it needs to be.
A RevOps tech stack should follow three principles. It must be:
- As simple and streamlined as possible
- Easy to use for all teams and departments
- Integrated to enable seamless sharing of information
Following these tenets, we believe HubSpot is the most effective RevOps platform on the market. It is more robust and customizable than other software and enables the centralization of the RevOps process while keeping all of a company’s data in one place.
Using HubSpot, RevOps teams can automate processes more easily, enable efficient communication between all relevant parties and act quicker on real-time information. But in many cases, businesses will still prefer to have support from an expert RevOps agency.
A Guide to RevOps Implementation
Every RevOps Program Requires a Framework
Given the number of different processes that influence revenue, it should be no surprise that all successful RevOps programs leverage a fixed framework to anchor all activities and enable effective implementation. These are built around the foundation of people, process, data and technology – and there are several well-established frameworks to consider.
3 Popular RevOps Frameworks
1. Waterfall Framework
A straightforward (and very popular) approach that focuses on passing leads and opportunities through fixed linear stages (known as “waterfalls”). The focus of RevOps becomes improving handoffs and ensuring all parties have a clear understanding of what qualified a “qualified” lead.
This framework is great for organizations with highly predictable sales pipelines, but struggles to accommodate the “non-linear” B2B buyer journey. Equally, it often reinforces operational and data silos by limiting cross-functional collaboration.
2. Agile Framework
Agile Framework: A framework drawn from the well-known “agile” development model, using the same principles to enable rapid iteration and flexibility. It places an emphasis on cross-functional initiatives and developing shared performance metrics to encourage collaboration.
This framework can achieve many of the core RevOps goals, including improving communication and driving more revenue. However, the improvements may not be sustainable because your sales and marketing processes change too much to enable long-term optimization.
3. Account-Based Framework
A framework that unifies account-based marketing (ABM) and account-based sales (ABS) under a single function to focus all energy on high-value “target” accounts. The emphasis is on sharing data and insights on key buyers and developing hyper-targeted content across all channels.
This framework is highly effective and can produce a lot of revenue, but it only works for organizations that know their ideal buyers – and can sustain growth based on a handful of sales. Companies that need a higher volume of customers or simply don’t have enough data on their targets are unlikely to benefit.
Ultimately, each of these frameworks can drive a successful RevOps program and generate more revenue. But you are better off developing your own framework based on your specific requirements – which is what the following framework helps you do.
5 Steps to Create a RevOps Framework
1. Map the ideal buyer journey
Map out the ideal buyer journey with no reference to the existing process. How could marketing, sales and service collaborate to produce better results? What would the ideal technological processes look like?
The point of this exercise is to establish an ideal to work towards, so it’s important not to consider the logistics too carefully. Instead, focus on understanding the buyers’ needs and what they would be most responsive to.
Source: Qualtrics.com
2. Assess current performance
Collect data from the various discrete systems, categorize it and map out the current pipeline. Cross-reference this with the existing tech stack to understand where leakages occur, how data flows through the system and how and why opportunities are lost.
Based on this, the RevOps team needs to pinpoint which aspects of the current revenue process work well, which need to be improved and which should be removed altogether. This provides a foundation for all subsequent RevOp activities.
3. Compare the two systems
How does the existing process compare to the ideal buyer journey that was laid out? Where are the obvious gaps or inefficiencies? And how could the RevOps team adapt the current system to look more like that ideal version?
While this can be painful, it is the best way to be properly critical of the existing system.
4. Cost/benefit analysis
Assess the practical value of changing each part of the system. Implementing a totally new system might allow a company to get closer to their ideal. But if it is too expensive and time-consuming, it may not actually be worthwhile.
This is the point in the process where practical factors like resources and technical limitations come into play. The goal here is not actually to build the perfect pipeline — it’s to determine which improvements will produce measurable results, so the RevOps team can allocate time and energy to those.
Even if your current setup and budget make an ideal pipeline unrealistic, you can still make incremental changes that will very quickly add-up to a dramatic improvement in your end results - as long as you have a solid plan.
5. Plan how to create that journey
List all of the changes the team has decided are worthwhile, and rank them in order of ease and cost. The most immediately valuable activities are likely to be fixing inefficiencies through automation and creating alignment between departments. The RevOps team can now create a timeline for implementation, ideally at least six months in advance. This will enable them to plan their activities and start driving revenue.
The Key Revenue Operations Metrics
Measurement is an essential part of RevOps, enabling the RevOps team to assess performance, make sense of their pipeline and optimize processes to produce more reliable revenue.
We can break RevOps metrics into two groups: revenue metrics and pipeline metrics. While not exhaustive, the following lists are a solid baseline for any RevOps strategy:
B2B revenue metrics to include:
- Lead to Win Rate: The total number of sales vs. the total number of sales opportunities.
- Deal Length: The total length of time from generating a lead to cementing a deal.
- Net Revenue (Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR): The amount of revenue produced in a given time period.
- Customer Acquisition Cost (CAC): The cost of sales and marketing divided by the number of new customers onboarded.
- Customer Lifetime Value (CLV): The average customer value times the average customer lifespan.
B2B pipeline metrics include:
- Conversion rates: The volume of leads that move through each stage of the funnel
- Lifecycle stages: The status of a lead as they progress through the funnel. Many businesses use lead status for this purpose, but Lifecycle stages are much more effective as they provide greater clarity.
How to Create Alignment Through RevOps
The case for sales and marketing alignment is clear, given that companies that achieve it see 20% annual revenue growth. But creating that alignment is not as simple as introducing new incentives; there is often a long-standing disconnect between departments, and studies find that 87% of words sales and marketing teams use to describe each other are negative.
RevOps teams must create processes that actively enable collaboration by reducing miscommunication. Here are three actions to take:
1. Establish clear definitions
Many businesses struggle with unclear definitions or a lack of specific shared terminology. What constitutes a ‘qualified lead’ can vary, and if both parties have a slightly different idea of it, things can get contentious very quickly.
Establish clear definitions for every metric and term used. These should be agreed upon between department heads, and the definitions should be accessible to every team member at all times.
2. Create SLAs
A Service Level Agreement (SLA) is a contract that stipulates the responsibilities of each department to the other. This can include deliverables, communication protocols and shared targets. It removes uncertainty and helps create confidence between teams.
The SLA should clearly state:
- A quota of leads marketing is responsible for producing at specific periods
- The maximum time sales can wait before contacting a Marketing Qualified Lead (MLQ)
Combined with a clear definition of qualified leads (and different types of qualified leads), this will ensure both departments know what is expected of them and trust the other to deliver results.
3. Implement shared dashboards for transparency
It is hard to align what isn’t visible. Shared dashboards make sure that both departments can see the other’s performance, ensure they are meeting their quotas and understand how better to serve their needs. Psychologically, this helps enforce the SLA and creates a clear incentive to perform better.
RevOps Best Practices
With RevOps being a relatively new concept, it’s important to follow best practices in order to maximize its potential benefits. Here we outline six RevOps best practices steps to unlock its true potential.
1. Consistent assessments
Schedule regular check-ins with team leads and departmental heads to assess performance and ensure alignment. This builds confidence, improves communication and helps to anticipate and address upcoming challenges before they become problems.
2. Create micro-targets
The ultimate goal of RevOps is big and often requires drastic change within departments and teams - which can be overwhelming. Avoid this by creating smaller sub-tasks and targets for each team so they are always within reach of their next goal.
3. Automate everything
Repetitive processes must be automated, but only when there is no obvious downside. Things like nurture campaigns for marketing or lead follow-up emails for sales are pure wins and should be automated as soon as possible.
4. Data maintenance
Sales and marketing data has a relatively short half-life; many companies also still have large quantities of historical data, which is compromised by poor tracking. Regularly audit data to ensure it is accurate and usable and build confidence within departments.
5. Adapt customer profiles
Sales, marketing and service need to understand their audience. But B2B buyers are changing all the time. Frequently update personas, ICPs and other strategic tools based on revenue reporting and industry trends.
6. Collect internal insights
Every department has a different view of customers, prospects and how the pipeline functions. Customer Success has knowledge that will help sales; sales’ direct customer interactions could produce important insights for the marketing team. Pool insights from all of them and incorporate those insights to help different departments understand the customer better.
