Revenue Operations (RevOps)

Revenue Operations (RevOps)

What is Revenue Operations?

Revenue Operations (RevOps) is a B2B business function whose goal is to maximize the revenue potential of an organization by creating alignment between sales, marketing, and customer success across the full customer life cycle.

RevOps teams implement innovative strategies, technologies, workflows, and leverage marketing automation to help B2B SaaS organizations optimize pricing for conversions and better margins, reduce revenue leakage, and identify new revenue opportunities.

RevOps succeed by improving the customer experience across all touchpoints, resulting in an optimized customer journey, consistent customer acquisition and predictable revenue growth.

Why is RevOps Important for B2B SaaS Companies?

RevOps takes responsibility for the technology, workflows, and processes of all revenue-generating teams within a SaaS organization, including sales, marketing, and customer success teams.

In doing so, the RevOps business unit breaks down silos and fosters cooperation between departments, addressing technology-related challenges, integrating systems and databases into a single source of truth for managing revenue and customer success, and helping the business sustain its existing customers while acquiring new ones.

Research from Forrester shows that organizations who achieve alignment between sales, marketing, and product functions achieve 19% faster revenue growth and 15% higher profitability.

What are the Roles in a RevOps Organization?

Early B2B SaaS businesses followed a traditional organizational structure where sales, marketing, and customer success functioned as three siloed departments.

In this traditional structure, each department would be supported by its own dedicated Ops/Enablement role, choose its own tools and technologies, and adjust or improve its processes based on feedback from its own data managers or analysts.

This system worked for optimizing productivity at the department level, but the lack of an integrated RevOps team prevented SaaS businesses from delivering a truly optimized and consistent experience as prospects moved through the customer journey. 

 

 

In the RevOps organization, roles related to operations, tools, business analysis, and data management across revenue-generating departments are absorbed into the RevOps business unit. 

RevOps roles may include:

 

  • Chief Revenue Officer (CRO) – CRO is a C-suite executive role with a focus on operationalizing the customer success mission. CRO responsibilities include corporate development, aligning sales and marketing with customer success, optimizing the firm’s pricing strategy, and maximizing revenue.
  • VP of RevOps – A VP of RevOps reports directly to a CRO or COO and is often directly responsible for achieving high-level revenue targets. To meet strategic performance targets, the VP of RevOps works to elevate inter-departmental communication and achieve revenue alignment across all customer-facing departments.
  • Director of RevOps – The Director of RevOps role is directly responsible for implementing the strategy, process, SaaS analytics, and tools necessary to drive revenue and sales growth. A Director of RevOps leverages project management and data analytics skill sets to monitor revenue metrics, forecast revenue, analyze the sales pipeline, manage ARR, and discover new opportunities to optimize revenue.
  • Revenue Analyst – Revenue analysts engage in activities like system auditing, financial and price modeling, and other forms of data analysis to identify new revenue opportunities.

What are the Core Activities of RevOps?

RevOps professionals use data-driven techniques and methods to optimize business processes and accelerate revenue growth for B2B SaaS companies. The most important activities for RevOps business teams today include:

 

  • CRM Implementation and Optimization
  • Lead Lifecycle Management
  • Lead Scoring Implementation
  • A/B Testing
  • Revenue Attribution Modeling
  • Financial Modeling
  • Price Modeling
  • KPI Definition and Reporting
  • Marketing Automation

What are the Most Important Metrics and KPIs for RevOps?

The most important metrics and KPIs for RevOps teams span across three revenue-generating departments: sales, marketing, and customer success. Aligning RevOps strategy with these KPIs ensures that teams are strategically focused on the things that matter: shortening and accelerating the B2B sales cycle, winning more customers at a lower cost, minimizing customer churn, and maximizing revenue.

Here’s a quick rundown of these KPIs, what they mean, and why they’re important:

 

  • Sales Cycle Time – A measurement of how quickly a SaaS company converts new leads into paying customers. Shortening the sales cycle results in accelerating ARR growth.
  • Pipeline Velocity – A per-day or per-month measurement of how fast the sales pipeline is generating cash. Faster is better, but increasing pipeline velocity requires a higher win rate, greater average deal sizes, and more SQLs.
  • Forecast Accuracy – Revenue and sales forecasting is only useful if it’s correct. That’s why RevOps teams need to be accountable for the accuracy of the forecasting models they develop to optimize revenue.
  • Customer Lifetime Value (LTV)LTV measures the total value of a single customer across the entire customer journey. LTV can be increased by reducing churn, increasing deal sizes, and through up-selling or cross-selling to existing customers.
  • Customer Churn – Customer churn is a measurement of how long a SaaS business retains an average customer. 
  • Renewals and Upsells – The overall ability of the customer success department to generate new revenue via contract renewals and upselling.
  • Win Rates – The sales department’s success ratio of converting leads/MQLs/SQLs into paying customers.
  • Customer Acquisition Cost (CAC) – The total cost of winning a new customer, from solution awareness to actual revenue.
  • Annual Recurring Revenue (ARR) – Preserving and increasing ARR is the ultimate goal for RevOps teams.

 

Making the RevOps business unit responsible for KPIs across sales, marketing, and customer success creates the ideal structure and incentives for RevOps teams to effectively align and optimize revenue generation for the entire business.

What is Customer-Led RevOps?

Customer-led RevOps is Directive’s own approach to revenue operations that uses our Customer Generation framework to drive customer and revenue growth while improving ROI for our B2B SaaS clients.

How do we do it?

We audit the customer journey and use 1st-party data to identify the best prospects that match the ideal customer profile (ICP) of our clients.

We analyze every stage of the customer journey to identify drop-off points in the sales process that are impacting revenue.

We use financial modeling to discover the potential optimizations that will have the greatest impact on overall revenue generation.

We build – or rebuild – departmental tech stacks, leveraging the latest and greatest revenue intelligence tools and automation to optimize the revenue-generation process.

Check out our latest success stories to discover how Directive is implementing Customer-led RevOps to generate SQLs and drive revenue for our clients in the B2B SaaS marketplace.

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