A RevOps Implementation Framework
- Revenue Operations is a growth strategy and operating model to provide centralized customer life cycle management and revenue growth execution. It's made up of a collaborative and cross-functional team of revenue architects and contributors.
- The two primary goals are to orchestrate the customer journey and the company's revenue growth strategy. The goals are symbiotic.
- RevOps adoption is skyrocketing because when correctly done, it works. The analysts at SiriusDecisions did a revenue operations study and reported that when successfully implemented, "organizations that deployed revenue ops in some form grew revenue nearly three times faster than those that didn't. Public companies with revenue ops also had 71% higher stock performance." These types of results are too big to ignore.
Business leaders are always on the lookout for strategies, processes and technologies that can accelerate revenue growth. Revenue Operations applies all three to grow the business.
According to Forbes, revenue operations was created as an end-to-end process of driving revenue. It starts from the moment a prospect considers a purchase (marketing). It continues when you close the deal (sales). It then extends to the renewal and upsell (customer service).
CRM software publisher Salesforce defines Rev Ops in more practical terms. The company advises revenue operations is a B2B function that brings together marketing, sales, service, customer success, and finance to pursue the three shared goals of i) price for better conversion and margin, ii) reduce revenue leakage, and iii) use customer data to identify new revenue opportunities.
While there is broad agreement that RevOps delivers big ROI and revenue growth, a consensus definition remains elusive. At Johnny Grow, we define RevOps as a business development team that provides centralized orchestration and oversight to all departmental revenue contributors. The team unifies go-to-market motions and revenue execution.
Where there is shared agreement is that Revenue Operations can drive improved customer relationships and a more cohesive and effective pursuit of the company's revenue goal.
And these joint goals are the overarching principals for our RevOps implementation framework. In this post I'm going to share our 5-step Johnny Grow RevOps Implementation process.
Design the Target Operating Model
Revenue Operations starts by defining its place in the company hierarchy. The team reports to the person with ultimate revenue accountability. For most companies, that's the Chief Revenue Officer (CRO).
A more sophisticated target operating model will be needed for global or decentralized companies. The below examples show how teams can be aligned for different types of support. In each of the below examples, the constituents being supported are illustrated as global regions.
While these are the three most used models, variations can be applied to accommodate different goals or constraints.
For example, we've had clients adopt hybrid models such as hub and spoke or models that oversee some but not all revenue producing departments.
The right model is most determined by company culture and recognizing where revenue control is exercised. Some companies have a history of centralized management while others promote decentralized control.
A decentralized model may be a higher fit where revenue direction and execution are driven locally. Or the federated model may make the most sense where these are shared responsibilities. With many federated models there is an intent to shift from centralized expertise to networks of expertise.
Federated models most often have a centralized team that advises revenue direction and priorities. They then cascade goals to departments or regions for aligned roll-up, and coordinates processes and technologies.
Regions or departments may then adapt or customize some processes or technologies to achieve their contribution to the company goal.
Be clear that Rev Ops is underutilized if designed as a shared services center. The division of roles and alignment of responsibilities is architected to increase focus, create specialization, and unlock innovation, all of which drive revenue growth, not simply achieve marginal cost efficiencies.
Define the Coordination of Responsibilities
With organizational structure defined, the target operating model can then allocate revenue, process and technology responsibilities where they make the most sense.
As an example, below is a workload allocation we did for a client. Every company is unique, but this model shares a lot of commonalities.
The first thing you may notice is that the Revenue Ops team seems to have more revenue, process and technology responsibilities than any of the departments.
That's true for accountability but not necessarily work effort. Many times, responsibility lies with Rev Ops because goals cross multiple business units, but effort is delegated back to one or more of those departments for execution.
For example, harvesting customer intelligence is clearly helpful to every department, so centralized with Rev Ops. However, marketing performs customer research and aggregates large volumes of customer data. So, transforming that customer intelligence data into account records may be assigned to the marketing department, with oversight to ensure that it remains helpful to all departments.
Or for another example, does it make sense to assign price optimization to a department? Our experience is that when this exercise is assigned to marketing the salesforce will decry the new prices are not in line with the competition or too high. When assigned to sales, marketing suggests the prices are not in line with the market opportunity or too low. Pricing impacts many parts of the company and should therefore be centralized to engage all constituents, eliminate departmental bias and make the best company decision.
Similarly, customer facing business processes cross departmental boundaries so business process re-engineering (BPR), streamlining and automation is best done by Rev Ops coordinating a cross functional effort.
This creates additional synergy as those cross departmental processes can be automated with cross departmental technologies. A common technology platform will eliminate data siloes and facilitate enterprise-wide information reporting.
The overall benefit of redistributing ownership of revenue workstreams to Revenue Ops is that those activities are centrally managed by a specialist with a birds eye view of company execution. Centralization also ensures redundant efforts performed in multiple departments are eliminated, and each department can be relieved of non-core activities so it can focus on its core mission.
For clarity and simplified management, we solidify the Revenue Ops TOM and allocation of shared revenue, process and technology into a charter document. That document identifies measurable objectives, stakeholders, constituents, performance criteria and key performance indicators.
Design a Staffing Model
Aligning processes, technology and coordinated contributions to a shared revenue goal requires staffing and governance.
Most Revenue Operations staffing models duplicate the much more common SalesOps and MarketingOps models. This makes some sense as there is overlap but it falls short for two reasons.
First, SalesOps and MarketingOps teams streamline departmental processes, better leverage technology, and transform data into information reporting. As their namesake implies, these are all operational activities.
What they generally don't include is enterprise strategy. For example, they don't set the revenue target, identify the top performance measures, or determine the most direct path to achieve slated company objectives. They don't create the revenue roadmap. Their job is to bring execution and automation to their part of the journey.
Revenue Ops is different in that it must create and articulate a clear revenue strategy and align marketing, sales and customer service operations to fulfill that strategy. Without a clear roadmap, the departmental contributors are uncoordinated at best and aimless at worst.
Second, while SalesOps and MarketingOps report to Sales and Marketing, respectively, Rev Ops is different in that it does not report to the departmental constituencies. While it serves the departmental stakeholders, it reports to the overarching resource responsible for achieving the company's financial target.
For smaller companies, a small Rev Ops team may report directly to the CEO or President. In larger companies, it is more likely to report to a Chief Revenue Officer who has overall revenue accountability.
From the prior steps, don't think that a RevOps implementation is about an org restructure. It's not.
It's about improving revenue execution to accelerate company growth. The prior steps are needed to facilitate the end goal.
Process harmonization is where the goal begins to be realized.
This occurs by advancing from departmental processes that deliver fragmented and incomplete customer experiences to streamlined, end-to-end customer experiences.
And that requires a two-step motion of defining the right performance measures and then optimizing business processes to improve those measures.
Most companies have pre- and post-sale performance measures. However, many times they have too many and that dilutes what's most important. A shift from activity-based metrics to revenue outcomes is the first step to increase focus and results. RevOps research shows the below metrics are the top performance measures for the Best-in-Class (i.e., top 15 percent) operators.
- Top marketing metrics: lead acquisitions, cost per lead, lead conversions, brand value, marketing's contribution to revenue and return on marketing investment (ROMI)
- Top sales metrics: sales win rate, sales quota attainment, sales forecast accuracy and year over year revenue growth
- Customer service metrics: customer satisfaction (CSAT or NPS), customer share growth, customer lifetime value growth, customer retention and cost to serve
Organizing these metrics in a RevOps Command Center or other revenue analytics will bring real-time visibility to revenue execution and predictability to revenue performance.
Process optimization is about clearly defining the most strategic processes and automating repetitive processes.
The most strategic processes include things like standardizing on a sale methodology or automating a multiple-step sales process. However, they may also respond to revenue degradation events such as fixing lead leakage.
When it comes to optimizing and automating highly repetitive processes, there are several business process optimization methods. However, our experience is that Agile Value Stream mapping is especially well suited for customer facing and revenue producing business processes.
This process optimization method supports the shift from doing things right (efficiency) to doing the right things (effectiveness). It’s the most effective process improvement method because it doesn’t just improve your existing processes, it measures the value of what you do to eliminate non-valued added steps and activities.
While improving process steps delivers incremental value, eliminating non-essential steps drives exponential savings.
Streamlining business processes roots out excess cost, improves execution, enables scalability and facilitates continuous improvement. Our experience has been that business process optimization reduces process cycle time by 15 percent or more. And because revenue-related business processes are very high volume, this sums to substantial time and labor savings.
The path to automation is to simplify, streamline and automate business processes; in that order.
So, following the prior step of process harmonization, it's now time for the RevOps implementation to apply technology.
The combination of business process optimization and technology automation is incredibly synergistic. Doing them in sequence will save significant time and money and deliver far more powerful benefits.
Technology optimization should start by designing the right RevOps tech stack, and that's the result of a three-step process that includes technology strategy, modernization and simplification.
The goal is to use a centralized RevOps tech stack to replace departmental piecemeal technologies with platform applications that better support enterprise-wide process automation, information reporting and scale.
It's not practical to acquire every helpful technology at once. In fact, that's probably too much change too quickly. So, the RevTech stack is designed as a multiple-year roadmap whereby the most essential technologies are acquired first. Their payback can then be used to fund the journey.
We’ve written about the RevOps tech stack process elsewhere so won't repeat that here.
The Point is this
A RevOps implementation orchestrates the revenue chain across departments and systems.
That requires leadership and a team that applies a company mindset and does not become distracted with departmental bias.
Leaders and teams must also recognize that a RevOps implementation is more of a change to the company culture than the org chart. The goal is not to consolidate resources, create a new business function or reduce the contributions from sales, marketing or customer service teams.
The two primary goals are to orchestrate the customer journey for improved customer experiences and improve systemic execution for revenue growth. Improving the first improves the second. The goals are symbiotic.