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Rev Ops: The Missing Link That Will Increase Your Revenue by 26%

Feb 11, 2021
Author: collin stewart

Early in his career, Jason Reichl had the realization that lots of companies had a great product, but they didn’t have a great revenue team. “They didn’t understand the art form behind sales, marketing, and customer success,” he remembers. The three branches of, as Jason calls it, the go-to-market team, were fragmented. They didn’t understand their buyers appropriately and they were using the same, tired templates for buyer experience born of the dot com boom.

But product-centric sales methodologies were starting to lose steam in the SaaS space, so Jason decided to start an organization that was both a software company and a consultancy, designed to fix this problem.

REVENUE OPS?

To understand the problem Jason is solving and how to solve it yourself, you first need to understand the concept of Revenue Operations. Revenue operations, according to Jason, is the unification of siloed operations teams in your revenue organization. 

Let’s take another step back. In Jason’s eyes, there are two sides to a business. The right-hand side is the product side. Business operations like facilities, the CFO, product developers, product managers, program managers, etc., all live on this side of the business.

Their North Star is one of two things: if they’re at an early stage company it’s growth, if they’re at a later stage company it’s margin. And it’s very easy to see how these personas all rally together to achieve this goal.

The left-hand side of the business is a little more complex, or perhaps, more accurately, misunderstood. This side of the business is comprised of your revenue team – sales, marketing, and customer success. As Jason refers to it, your go-to-market team. The people who support those functions under the hood are the Revenue Operations team.

In the past, these personas were probably known as sales ops, marketing ops, customer success ops, or salesforce admins, and they usually rolled up under the sales or marketing VP.

Jason has another vision for Revenue Operations. He asserts that they should roll up directly to a CRO or CEO. They’re more than the supporting class of the revenue organization – they’re the “yin” to the go-to-market team’s “yang”.

To throw in an acting analogy, the sales, marketing, and customer success team are the actors. They’re on the red carpet shaking hands with fans, kissing babies, and entertaining people. But behind the scenes, shining a spotlight on these teams and creating/maintaining their platform are the key grip, camera ops, and director – the Revenue Operations team.

BUSINESS IMPACT

Most orgs that get to a Series A start to build an operations team focused on revenue. They might hire a salesforce admin or marketing automation person to facilitate their growth. That’s the old way of doing things. And it works, to a certain extent.

Just having an internal operations team focused on enabling your revenue activities will give you a 10% boost in revenue growth. If your company has zero operations and you set a target to grow by $1M, you’re going to grow by exactly $1M. If you put a legacy operations team in place, you’ll increase your growth by 10% and you’ll hit $1.1M. If you put a Revenue Operations team in place, you’ll increase your growth by an additional 26%.

The way you achieve this impact is by bringing people onto your Revenue Operations team that are focused on customer-focused operational gaps in your buying experience.

BUYING EXPERIENCE

There’s a lot to unpack there, so let’s start with buying experience. Simply put, buying experience is the way in which a customer buys. An example might be a long enterprise deal where your salespeople have to talk to a large buying committee before a decision is made.

Conversely, a velocity buying experience is one where the customer never speaks to a sales rep and moves through the pipeline by signing up through your website, completing a free trial, then upgrading to a paid product. Most orgs have somewhere between three and ten buying experiences.  

What Go Nimbly has found in their research is that buyers of high tech software, or any kind of enterprise b2b product or service, already want to buy from the companies that they talk to.

Someone who goes and starts a buying experience with Zendesk is 75% sure that they want to buy from Zendesk. And as a person looking to buy a new product or service on behalf of your company, what you’re deciding is how much personal risk to take before you make a purchasing decision.

CUSTOMER-FOCUSED BUYING EXPERIENCE

This is why a customer-focused buying experience is critical. Every interaction you have that dings your confidence in that company will result in less LTV and less commitment from the customer. You still might make the win and close the deal, but the customer could have signed a bigger deal or gone for a bigger pilot, but they decide instead on something small to minimize their risk. 

So how do you create a seamless buying experience for your customers? By eliminating silos in your internal structure. 

Jason “doesn’t really give a shit” if your teams are dysfunctional internally. He doesn’t care if it’s hard to work together, and he doesn’t care about marketing-sales alignment. What he cares about is creating a good buying experience for people who want to buy from your company.

Revenue Operations will make that experience better and better, which will have a knock-on effect of making your internal teams run more effectively. If you focus on the customer, the entire revenue organization sees better results and the people accept the changes much more rapidly. This is how you transform your organization and see an impact on your bottom line.

THE INFRASTRUCTURE

The infrastructure you need to put in place to eliminate these silos is a flywheel which includes:

  • Strategy (overall strategy, process strategy)
  • Tools (tools that get enabled)
  • Enablement (enabling the team at scale)
  • Insights (looking at insights to drive more strategy)

The fundamental piece here is strategy. The most basic level of operational strategy, Jason calls “intuition,” or intuition-based operations. An example of this would be if a sales rep pointed out an issue like, “Salesforce isn’t working,” and the operator decides to fix the page layout. There is nothing wrong with this strategy, but it’s solely based on people’s intuition of what might be wrong – no hard data. 

The second level of operational strategy is what Go Nimbly calls “experience-based operations”. This usually happens when you hire an operations person from a company you admire. That person comes in and says “this is how we did it there,” and then set things up the same way at your company.

These operations become less task-based and more project-based, but they’re based on your operator’s experience – no hard data.

Finally, the highest level of operational strategy is customer gap-based – the Revenue Operations team is analyzing and figuring out where gaps are in your buying experience. This doesn’t mean your intuition as an operator is wrong or that your experience is irrelevant, but you weren’t prioritizing your customer.

An ops team is not about servicing the internal ops of the business, they’re about servicing the customer. The whole revenue org has to have this mindset to see the revenue impact.

HIRE A GENERALIST

You’re sold on the idea of breaking down your silos and building a cross-functional, customer-focused Revenue Operations team. But who do you bring on?

You need operations people who are willing to be generalists. When you’re recruiting, people will come to you with a skilled background that is necessary for the role. If you have a gap in your operations that needs to be filled, there’s nothing wrong with hiring someone with the expertise and experience to do that job.

The problem with that is that, early on in your Revenue Operations journey, you don’t know what you don’t know, and if you hire someone that’s deep in a specialty and that’s all they care about, they’re going to see everything through that lens. This takes away your ability to be flexible. 

Instead, take someone with many skills, and follow a servant leadership model. Have this operator set the strategy in their area of expertise and have someone else do the tool work. Then, have them to do the tool work in the areas outside of their expertise to make them well-rounded.

FINDING THE GAPS

Go Nimbly has invented a methodology designed to find the customer-focused operational gaps in your buying experience. It’s called 3VC for volume, value, velocity, and conversion. There are two types of gaps that you’ll find: reactive ones and proactive ones. 

Reactive gaps already exist in your customer-facing processes. You can look for 3VC by pulling your salesforce data and identifying bottlenecks, drops in volume, low conversion, etc. If you can identify why the gap exists, you can solve it. 

If you can’t immediately identify why the gap exists, you can run a proactive durability test. A test like this might be to try new strategies as controlled experiments and measure against your past success in a certain area or industry benchmarks. You will cycle through this Iterative reactive and proactive cycle as you identify gaps, solve them, and get to this 26% revenue growth increase through the flywheel of Revenue Operations.

CONCLUSION

Silos between sales, marketing, and customer success ops are a relic of an old, product-focused sales methodology that has long been dethroned. Jason Reichl believes that the new order of operations is the Revenue Operations team – a cross-functional team full of experts willing to be generalists designing operational strategy, building/finding/optimizing tools, enabling the revenue organization at scale, and deriving insights from the data to start the process all over again.

Only a unified rev ops team can facilitate a truly customer-focused buying experience, and a smooth buying experience is the ticket to trust, increased customer loyalty, and higher LTV – resulting in a 26% increase in your revenue growth.

EDITOR’S NOTES:

Our experience with being customer-focused: Learning to put our customers first, the hard way. 

And on breaking down silos: How to align marketing and sales to increase revenue with keynote speaker and expert business coach Jeff Davis

 

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