The world is changing, and business operations are changing with it. Whereas once upon a time marketing could function separately from sales teams, that time has passed. Industries of the future need a more holistic approach.
But, this isn’t just an anecdotal idea.
The fastest growing jobs on LinkedIn all include the word “Revenue”: Director of Revenue Operations, VP Revenue Operations, and Chief Revenue Officer (CRO). It’s clear that revenue has become a hot title. In fact, according to SiriusDecisions, there was an 81 percent increase in title changes to include “revenue” on Linkedin between October 2018 to February 2019, making Revenue Operations “the fastest growing profession out there.”
What’s driving this?
A culmination of factors has given rise to the need for enterprise-wide revenue operations (RevOps). In particular, four factors have instigated it:
• A surge in the subscription-based business model,
• A plethora of customer data,
• Customer expectations for holistic interactions with organizations, and
• Technological advances that unlock an enterprises’ ability to gain a 360 view of their operations.
In this article, we’ll take a deep dive into the above four factors that created the rise of the Revenue Operations role, as well as why RevOps needs a powerful AI solution to generate the insights it needs to be successful.
But first, what is RevOps?
What is RevOps?
RevOps is short for a new department called Revenue Operations.
Revenue Operations (RevOps) has emerged as a way to align sales, marketing, and customer success to drive full accountability across the entire customer journey. It’s a union of three functions that was unheard of until technology became capable of harnessing actionable insights across diverse systems. In fact, not only has sales, marketing, and customer success historically been siloed; they’ve often resisted the idea of playing nicely together.
This new department of RevOps, creates an agreement as to which metrics matter most and introduces a new layer of credibility or trust. After all, when different departments have separate goals, they may not always believe that they are acting in each other’s best interests.
Take SaaS companies for example. The average firm in that industry employs 32 different tools within their sales and marketing stacks alone. Customer satisfaction pulls from a completely separate palette – and that’s a problem. Many of these tools do the same things but in a different way or featuring a slightly different format. Employees in the same company, on the same product line, end up repeating work unbeknownst to each other.
The tools themselves are also linked together via specific integrations and they tend to break. Which department is in charge of those repairs? No one owns the stack, just specific functions within those operations. Add to that a barrage of self-service tools and customer data is peppered across different devices and systems, often leading to errors updating information such as differing formats. It is ineffective and unnecessary.
Key Benefits of RevOps
Revenue Operations resolves all that and brings the entire team together under the same goals. It is a powerful solution that has three important benefits.
1. Align Everyone
First, Revenue Operations helps to align everyone. Marketing, sales, and customer success are usually held so separately – but that is a mistake. When you start using a RevOps strategy, you get the chance to bring together each of those departments under one banner. This change unifies your metrics, so it is easier to track performance in a meaningful way. Aligning everyone also makes it easier to assign ownership over tech and tasks as well as manage change throughout the organization.
2. Create Focus
RevOps also creates focus. Under legacy systems, internal and external stakeholders need to be managed with regard to the individual roles they play. The problem is that each of these functions requires a different focus – and it’s not always the same aim. Every role has its own goals and they often are quite separately, if not contradict entirely.
Revenue Operations changes that by bringing everyone together under the same performance metrics and, thusly, the same focus. This narrowing of goals isn’t just more attainable. It is easier to track and monitor progress.
3. Simplify Everything
Finally, RevOps simplifies everything. By combining everyone on to a single team, decision-making, change management, and agile operations are much easier because there are fewer hoops through which to jump.
Many legacy operations carry the same basic organizational structure they have had for decades. As technology necessitated new functions, additional roles were tacked on the org chart. This might have made sense at the time, but it carried the consequence of allowing leadership roles to grow too broad and ultimately become ineffective by being unnecessarily complex. Revenue Operations removes that risk entirely.
Getting Started with RevOps
There are two basic ways to get started with RevOps.
The first is to distribute capabilities. For instance, you may have the same ten people designing your marketing strategy and planning sales initiatives. However, this is usually a better fit for smaller organizations that have fewer than 100 employees. As you grow your operations, you will need to consolidate roles to create more distinct or specialized roles. This leads to the second way to get started with Revenue operations – consolidation. For example, you may have one person who examines and interprets web traffic while another person runs AB testing on all marketing ventures. The right choice depends on the current size of your organization and the business model you prefer.
Adding RevOps to your company’s business processes and operations creates a ripple effect that improves everything about your organization. Many businesses find that revenue increases after they create a Revenue Operations department because sales capacity grows while ramp time takes a steep reduction. In turn, growth becomes more predictable. It is easier to spot which revenue sources may be at risk as well as which characteristics in your salespeople are most effective. You might also find it easier to adapt to market changes and spot opportunities for vertical integration.
Four Factors that Have Given Rise to Revenue Operations
Revenue Operations has emerged as a convergence of several factors, at a time when every company in every industry is striving to streamline functions to deliver customer experiences that are consistent across every touchpoint.
These factors are the reasons why RevOps exists, but as we’ll see later, the vision of what RevOps is intended to do — oversee and optimize sales, marketing, and customer success based on data — may be greater than what humans alone can achieve.
1. Customer Expectations Demand Streamlined Operations
Today’s customers expect to have streamlined, holistic experiences with the brands they do business with. These expectations have prompted organizations to create synergy among departments that have traditionally been silos of marketing operations and sales operations. Sales, marketing, customer success, customer service — all must align and be on the same page to keep customers happy and subscriptions renewed.
In the legacy customer lifecycle below, you’ll see the siloed departments who hand off the customer as they progress from marketing to sales to customer success. In the customer lifecycle with RevOps, you’ll see both marketing and operations spanning the lifetime of the customer. This alignment and holistic view of a customer allows for company’s to give customers a more personalized, and seamless experience.
“After working on more than 1300 SaaS operational workstreams, I’ve come to one conclusion: Buyers demand a personalized, leak-proof customer experience.” – Jason Reichl, CEO of Go Nimbly
2. The Subscription Economy Boom
Over the last seven years, the subscription economy has grown 300 percent, reports the subscription management services company, Zuora. In fact, in their latest Subscription Economy Index, Zuora found that “In over 28 consecutive quarters (January 1, 2012, to December 31, 2018), subscription businesses grew revenues about five times faster than S&P 500 company revenues and U.S. retail sales, and 10 times the sales growth of the DAX (Germany) index and ASX (Australia) index.”
The subscription economy model has brought a shift in focus where what happens after the sale is just as important as what happens before the sale. With churn and retention key factors in revenue, Customer Lifetime Value is fast becoming more critical than Cost Per Acquisition.
This new business model has created a need for a new operational leader that can provide a complete view of the revenue lifecycle to best manage growth and minimize churn, leading to the hot trend for “revenue” job titles.
The subscription economy has come at the same time that data has exploded in volume.
“Zuora’s Subscription Economy Index shows the great potential of the subscription model – over 300% growth over the last seven years. The report also found that overall, about 33% of subscription revenue growth comes from increasing revenue on existing customers, and for business products (B2B) that ratio increases to nearly 50%. If you consider upsells and the key role of churn in Customer Lifetime Value, it is clear that what happens in the relationship with the customer after the sale is just as important as what happens before the sale.” – Dr. Carl Gold, Chief Data Scientist at Zuora
3. Customer Data Is Becoming Too Big to Handle
The volume of available business data is growing exponentially, with more added every day from billions of organizational activities on phones, emails, video conferencing, and communications services.
There is more data available today than ever before, and organizations are seeking ways to turn this overwhelming abundance of customer and prospect activity data into value that informs customer experience, drives sales, improves renewals, and reduces churn.
“With technology being used more every day to communicate and collaborate in business there’s been a surge of data available to companies across industries so much so that we see the volume of available customer data doubling over the next three years. Industry-leading enterprise organizations are finding ways to capitalize on this influx of data in order to understand how their business is running and provide more value to their customers.” Jim Lundy, CEO and Lead Analyst, Aragon Research
4. Artificial Intelligence and Machine Learning Make Revenue Operations Possible
Just a few short years ago, having a RevOps team was just a vision for the future. Consolidating the necessary interdepartmental business and customer data from sources such as demand generation, customer success, resource performance, and revenue was nearly impossible to gather and analyze in an effort to build and measure your full funnel or “Revenue Engine.”
Traditional Revenue Engine
The global B2B research and advisory firm, SiriusDecisions, defines a “Revenue Engine as all the capabilities and functions in a B-to-B organization that influence or source leads, including marketing, direct sales, channel partners, or other prospecting and outreach functions.” This traditional revenue engine fuels the organization through the continuous flow of new business.
Subscription Focused Revenue Engine
The subscription focused revenue engine is a continuation of the traditional revenue engine with the addition of the functions such as implementation teams and customer success. The implementation of subscription focused revenue engine acknowledges the organizational focus on increasing ARR (annual recurring revenue) through both bringing on net new business as well as reducing churn and expanding existing customer contracts.[
In both revenue engine models, customer data is produced by every touch point. Every email, phone call, and meeting from the go-to-market teams create a digital piece of data that isn’t being captured or analyzed, making it not just difficult, but rather impossible to optimize your revenue engine.
Today, AI and machine learning make it possible to track, gather, and make sense of data produced from communications and activities generated by your organization’s Revenue Engine; whether it be traditional or subscription. The combination of new data and technology provide the key insights to optimize and grow revenue.
All of these factors have culminated in the emergence of Revenue Operations (RevOps).
The Rise of RevOps
In response to those four factors, organizations are moving from hoarding data and functions in departments like sales, marketing teams, and customer success to sharing it all under one Revenue Operations roof. This pooling of data and functions has generated an industry consortium leading to organizational comprehensiveness, as well as a cohesive customer journey and therefore has created higher overall value.
In the graphic below, you’ll see the consolidation of operational functions from the “Legacy Org Chart” to the “Org Chart with RevOps.” By moving Sales Operations, Marketing Operations, and Customer Success Operations under the same roof, data, operational goals, and reporting become more consistent and reliable.
Go Nimbly, a SaaS consultancy focused on bringing Revenue Operations to their customers, defines a Revenue Operations Team as any operational function in your business that is focused on the customer
or supports the scalability and delivery of GTM functions. Note that they didn’t say support the GTM team. Thinking of your operations team as a support mechanism for your GTM teams is a sure fire way to reduce the autonomy and ability for a Revenue Operations team to prioritize and drive revenue.
What does it mean to drive revenue as an operations team?
- You set and align the GTM strategy to the business goals and which workstreams will impact revenue the most.
- You build connected systems through software, APIs, and data so that the customer never experiences a drop in your buying experience.
- You enable the GTM team members in strategy, process, and tools to ensure that the customer buying experience is gapless and avoids any revenue leakage.
- You use data gathered from the GTM team and find trends and insights that drive an operational roadmap and further defines strategy.
If your RevOps team follows the four above principles, the operations team can drive up to 26 percent more revenue out of each customer without increasing the GTM lift.
Why RevOps Needs AI to Be Effective
It can be easy to assume that a focus on revenue will automatically lead to an increase in revenue. Hiring a “Revenue” person is just the beginning of an organizational-wide shift that must encompass a holistic view of a customer and prioritization of the collection and analysis of prospect and customer activity data.
RevOps relies on accurate, reliable data cultivated and consolidated across all go-to-market systems. Specifically, it relies on customer activity data, which is generated through every interaction with customers.
- All customer contact information
- Calendar data(meetings, attendees, cancellations)
- All digital communications (email, messaging, phone)
- Salesforce data(all history)
- Customer account history
- Product telemetry
- Sales data activity
- Marketing campaign analytics
- Support resource activity
- Financial information
- Sales and marketing rep activity
Capturing this data has been a challenge for people and much of this data is routinely lost because, up until now, people have had to manually enter it into their CRM or a spreadsheet.
Without an AI-powered revenue intelligence system that automatically captures all contact and customer activity data, dynamically updates your CRM, and provides your RevOps team with actionable intelligence, you’ll simply have mismanaged sales, marketing, and customer success teams.
“In order to be effective in their role, Revenue Operations (RevOps) leaders must be willing to adopt sales performance analysis capabilities. Deploying an AI-enabled solution that analyzes rep interaction across the entire communications spectrum to include contact aggregation identification and analysis, call volume as well as conversation analysis, email tracking and analysis using natural language processing (NLP), meeting attendance, and text tracking; will empower and guide the way for RevOps to measure and optimize an organization’s revenue engine.” Dana Therrien, Sales Operations Strategies, SiriusDecisions
Why AI? Because Data Entry Just Doesn’t Get Done
The truth is that only 20 percent of an organization’s data is captured.
That means most organizations are losing 80 percent of their data simply because humans fail to enter it. This also includes missing contacts or inaccurate contacts. On average only two out of 12 of the relevant buyers, influencers, and users are captured in a sales opportunity.
Data quickly becomes outdated, too, as people change jobs, roles, and names.
Let’s look at an example from Sales:
- 30% of time spent on manual data entry.
Sales reps spend 30 percent of their time on manual data entry — logging only 20 percent of customer activity and contacts. Not only do reps see this as a waste of time, they know that the CRM is not a true system of record. Which means they use it even less.
If you have 100 highly skilled, highly paid salespeople, spending 30 percent of their time on data entry, you lose 30 percent of your selling capacity just to manual data entry.
- Only 2 of 15 contacts ever get entered into the CRM.
The Harvard Business Review reports that there is a growing number of people involved in every B2B solution purchased, with an average of seven people in the buying group. This idea of large and growing buying groups has been echoed across industry research firms with some finding that the average buying group trends upwards of 12-15 people depending on the complexity of the product or solution. Reps only enter, on average, up to two contacts (mostly so they can move to the next stage).
If you are a midsize enterprise doing around 1,000 opportunities, you’re losing 10,000 contacts — key decision makers and influencers in those companies. Once again, due to manual data entry.
These lost contacts are not getting marketed to or you are unable to know if you have marketed to them and whether they impacted the sale — making marketing attribution near impossible to get right.
What happens then? Post close, the account is handed off to Customer Success and they are supposed to figure out who to work with for implementation and renewal. They often end up having to re-create those relationships all over again.
Because people hate manual data entry.
Without data, RevOps can’t succeed.
AI solves for this.
Harness the Power of an AI Revenue Intelligence System
It may seem a bit down in the weeds to talk about data entry in relation to RevOps, but we’re here for a reason. Without accurate, synced, multi-system data you cannot succeed in RevOps.
An AI-driven revenue intelligence system delivers that data to you.
It automatically captures ALL customer activity data with 100 percent accuracy and matches it to the right accounts.
“We saw immediate ROI using People.ai seeing a 10-20x increase in contact creation in our CRM every month… As a result, we are significantly accelerating our pipeline growth and converting between 40-80 leads to contact creation every month.” – Kaushik Patel, VP, Online Marketing & Marketing Operations at ThoughtSpot
No more manual data entry. No more lost contacts. No more second guessing whether the data is trustworthy.
Not only does a revenue intelligence system capture data from sales; it captures all marketing and customer success data as well. Creating an automated way for RevOps to synchronize data across all go-to-market functions without having to burden anyone with more work.
A Revenue Intelligence System Creates Powerful, Reliable Data and Capabilities
Several capabilities of a revenue intelligence system include:
- Automated contact capture and enrichment
- Identification of optimal buying groups
- Self-healing CRM contact database
- True source attribution
- Alignment of sales and marketing under a single source of truth
- Increased productivity through automated CRM activity capture
- Rep opportunity and account based activity reporting
- Data-driven sales coaching and benchmarking
- Optimal deal path and buyer coalition analysis
- New rep ramp acceleration
- Increased CRM adoption
- Engagement activity scoring (implementation/renewal activities)
- Identify customer challenges and upsell opportunities
- 360 view of customer engagement
- Early warning and customer churn detection
- ROI on time and resource allocation
- Compensation vs. contribution
- Resource and production planning
- Deal and churn scoring
These are a few of the capabilities of a revenue intelligence system. The beauty of such a system is that because it’s built on machine learning, it evolves as you evolve — generating deeper value the more you draw on it for strategic and tactical data.
People.ai Gives You the Revenue Intelligence You Need
As we have seen, without AI to collect, sync, and make sense of cross-functional, multi-system data, RevOps has little chance of achieving its goals.
People.ai is the only Revenue Intelligence System that automates the capture of ALL contact and customer activity data, dynamically updates the CRM, and provides actionable intelligence across your management tools.
People.ai allows you to realize the full selling capacity of your customer-facing teams.
Are you ready to start leveraging the power of artificial intelligence to get more out of your revenue engine?
Find out how People.ai helps RevOps gain visibility, increase their team’s productivity, and optimize their revenue engine, by scheduling a demo of the People.ai solution today.