Wondering what revenue operations is? You’re in good company. Even revenue leaders are divided on what revenue operations professionals do, which is why you’ll see job descriptions and department structures vary from company to company.
Put simply, the purpose of revenue operations is to look at the big picture and do the best thing for the company at large. They streamline internal processes, make established systems more usable, and keep customer-facing departments aligned so the hand-offs between teams are as seamless as possible.
If you’ve worked with marketing, sales, or customer success personnel in any company, you’ll note a degree of tension between these departments. The conflict is natural. The personality profiles that do well in each role tend to be very different, they rarely share the same goals, and even if they do share goals, the way they go about achieving them contrasts with one another.
Revenue operations looks beyond a single department’s needs and considers what will generate the most recurring revenue, arguably the single most important metric for any growing business. Customer satisfaction, operational efficiency, and the right data to inform decision-makers are critical ingredients in a successful revenue operations organization.
As Alisa Goldschmidt, a revenue operations professional out of Denver, put it:
“When I explain RevOps to people who aren’t in the sales/marketing world, I describe it as everything ‘behind the scenes’ needed to drive revenue. That includes people, information, processes, and technology. A company needs effective and efficient RevOps in order to attract, acquire, and retain customers.”
I’ve been asked whether revenue operations is a fancy name for sales operations or marketing operations.
Revenue operations should span marketing, sales, and customer success to minimize the impact of traditional silos. The function should be responsible for insights, enablement, tools, and processes.
“Revenue Operations is essentially trying to convince your dad that a Tesla Model S is faster, smoother, more comfortable, more efficient, and easier to drive when all he wants is his tried and true ’65 Lincoln Continental.”
It can be really difficult to convince a leader that the method they’ve “always” had success with is no longer working. This could mean a pitch, a marketing channel, or support technology is simply no longer the best option on the market. Revenue operations should serve as a company’s neutral observer and use data to steer leadership in the right direction.
Revenue operations is responsible for developing goals for marketing, sales, and customer success, and those goals are meant to reflect the company’s true north: revenue production.
For example, historical marketing metrics included marketing qualified leads and marketing set meetings. Someone in revenue operations may include these metrics as early indicators, but the north star would be pipeline and revenue generation, which is closely aligned with sales quotas. Then customer success would be held to retention rates (renewal rates) and perhaps expansion rates.
Revenue operations typically has at least one analyst who works cross-functionally to define key performance indicators (KPIs). They clearly define how these KPIs are calculated and the systems of record for pulling the data. They’ll identify any reporting standards and make sure that analysts in departments throughout the company are using the same methodology to avoid confusion or conflict. A RevOps analyst is also responsible for tracking historical trends and developing forecast models used in budgeting exercises, year-end planning, and board projections.
“I told my team today, RevOps is a function that helps drive an infinite mindset. [W]e can encourage the finite mind of an org by just giving data, but true RevOps is taking data and process to help drive an infinite outcome and direction. RevOps is helping have a realistic view of the business and then turning it into something executable.”
A best-in-class revenue operations organization will go beyond reporting a KPI and come to the business with theories on why a KPI looks the way it does and present recommendations on how to fix it. This involves digging into systems, interviewing internal stakeholders, and testing theories.
When people say “enablement,” they typically think of sales enablement that emphasizes product training and pitch decks. Revenue operations enablement spans across departments and has an added emphasis on data-driven training. Insights are used to determine who the most successful representatives of each department are in order to figure out what can be scaled to the entire workforce.
Let’s say our top sales producers are Jessica, Annie, and Marko. Jessica's close rate isn’t stellar, but she starts with a large number of second meetings. Her pitch is outstanding. Annie has developed an ROI calculator for her champion to share with their CFO, and Marko’s proposals have a level of professionalism that can’t be beaten.
Enablement leaders would look at these reps and realize the components they each do well could be shared with the entire sales force, making everyone more efficient and effective.
Technology is great when it works, and it works best when someone is at the helm who understands how to “attract, acquire, and retain” a customer.
Early in my career, I represented a sales organization (I was in sales ops) throughout a Salesforce implementation. The company sold websites. Things were heated from the outset. I thought it served sales best to define an account as a physical business location. We could then use indicators to help refine targeting. Customer success firmly held that “accounts” as they existed in Salesforce should be websites.
If we hadn’t both been in the room, we would have both lost out. From my perspective, the websites were just a product hanging off the account. To customer success, the web-id was how they assigned their support personnel and curated content for the customer. On the flip side, customer success didn’t care about non-customers, so didn’t think about salespeople needing to target net new locations in order to hit their quota.
Ultimately, we sorted it out, and the organization is still using the same schema in their Salesforce instance 12 years later.
Because revenue operations spans these functions, they have the information necessary to avoid blind spots each of these siloed operations organizations displayed on their own.
Early on, I learned that my role in operations was to temper the data leadership demands with what is realistic for the people who would generate the data.
I’ve witnessed a problem in multiple technology startups. Data-driven executives want every data point possible to help guide them in decision making. The impulse is understandable. Early on in a product’s life, we need to understand its efficacy, the traits it’s missing, the profile of the person who wants to buy it, and which industries are buying.
Unfortunately, there’s an inverse relationship between the amount of information you require from a human and the accuracy of said information.
While the executives maintained that good data hygiene was why they paid a salesperson a base salary, the sales team didn’t share the sentiment. When they hit 20 (!!) validation rules on Salesforce's opportunity object, there was a revolt. Sales went from randomly clicking responses to outright refusing to use the system.
Alisa Goldschmidt, a revenue operations professional out of Denver, looks at it this way:
“I feel that the most successful RevOps professionals and teams have both the global view of the entire customer journey (including what strategies are needed to be successful at each stage) and the hands-on process and tech abilities. However, the most important quality is asking the right questions and actively listening.”
Once revenue operations discovers the happy medium between data requirements and usability, we do expect teams to comply with the new processes in order to keep things efficient. We’ll even create reports and push management to use carrots and sticks to maintain compliance. And if we’re in charge of compensation plans, you can bet we’ll try to sneak in a component that drives CRM usage.
“I define RevOps as being the glue that holds the entire go-to-market function together. However, I just asked my wife what she thought I did in RevOps, and she said, ‘I don’t know but you seem to get mad at people a lot for not following process.’”
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