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The Revenue Operations Blog

An Introduction to Revenue Operations

May 12, 2022
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Revenue operations is the discipline of removing the barriers between go-to-market silos. It ensures the entire revenue funnel is predictable, repeatable and scalable. 

Before revenue operations, silos would result in miscommunication and loss of productivity. Revenue operations brings together:

  • Marketing and Demand Generation
  • Sales and Customer Success
  • Account Management and Customer Service

The customer experience plays a significant role in revenue growth. It’s a key point of differentiation. After one bad experience customers will often stop doing business with a brand. Revenue Operations ensures a seamless customer experience. It aligns these functions into one coherent movement. Revenue Operations is designed for today's digital model avoiding dated organizational systems.

Who is Revenue Operations For? 

Working together as one revenue team is a critical issue for any B2B organization. Especially fast-growing businesses, such as software companies or software as a service (SaaS) companies. It challenges entrenched beliefs surrounding growth, requiring support from leadership. 

How does Revenue Operations Work? 

The goal of revenue operations is to ensure that the revenue strategy of the business can be well planned and executed. It involves People, Processes, Data and Technology. Predictable revenue is delivered through easy-to-use workflows and processes. Often these teams use the same data and software, there isn’t a need to keep them separate. The daily task of executing is made easier and is aligned with the plan.

What are the Key Features of Revenue Operations?

Revenue operations is the infrastructure that supports the revenue process. The function is deep and broad across several areas. It's about how to bring people together to do tasks with the right technology in a way that they stay motivated. All the while capturing the right data that will help the business learn and make better decisions. Key features are:

  • Data and strategy-driven
  • High levels of accountability
  • Collaboration between teams
  • High win rates
  • Predictable growth

An effective revenue operations leader will develop extensive experience in all things operations. An important feature of the discipline is being able to think both strategically and tactically. The data piece is critical, you need it to make informed business decisions.

What are the Key Benefits of Revenue Operations?

Before revenue operations, there were operations dedicated to the different silos under revenue. These included marketing, demand generation, sales and customer success. People were only concerned with their silos, to the detriment of someone else's. This causes internal friction, or even worse, a lack of alignment. If these disciplines don't work together, there will be inefficiency. This causes an inability to execute the strategy. 

The benefit of revenue operations is to bring all of the silos together. They are aligned with one another and support one another. They have common goals and common metrics, aligning around a common plan. 

Revenue operations involves challenging the status quo. Revenue operations professionals are always looking to streamline, improve efficiency and be more effective. They have a strong sense of accountability and care about getting things done. It’s about taking a high-level objective, creating a framework, and building an action plan. Then turning that plan into reality through execution.

Revenue Operations Metrics

Every great revenue operations strategy should have the aim of influencing key metrics. These will impact how well a business can scale and how successful its funding rounds can be. They tell us how efficient it is and how fast it can grow. Key metrics that leading revenue teams focus on are:

  • Win rate : The percentage of deals that are closed.
  • Sales cycle: The series of events that occur during the selling of a service.
  • Average deal value: The average amount a customer spends on your service.
  • Pipeline growth: The rate at which your sales pipeline is growing.
  • Net revenue retention: Net Revenue Retention (NRR) is the percentage of recurring revenue retained from existing customers over a given time-period.
  • LTV to CAC ratio: The Customer Lifetime Value to Customer Acquisition Cost (LTV: CAC) ratio measures the relationship between the lifetime value of a customer and the cost of acquiring that customer.
  • Capital efficiency: The ratio of how much a company is spending on growing revenue and how much they're getting in return.
  • Churn factor: The rate at which customers stop doing business with you.

How does Kluster help with Revenue Operations? 

Investment in technology has been concentrated on helping teams to execute outreach sequences. This includes deal insights, contracts, CPQ and E Signature Tools. The technology available to help your teams execute better is important. However, this is 50% of what delivers revenue strategy the other 50% is planning. It’s critical to have the workflows, tools and insights to turn everyone in the revenue team into world-class planners. This is what ensures predictability and repeatability. This is the significant gap that Kluster will fill.

Always been told you "need 4x coverage (ratio between funnel and revenue targets) to hit your number"? 

Well, what if it's 3.2x or 5x, because your team is different?  

Kluster gives you the exact coverage you need using your team's live conversion rates. No more company averages or guestimations and hoping you'll be ok.

Ever wanted to model out how you're going to hit your new loftier target? 

Quickly ‘scenario plan’ with Kluster Vision. Change your order value, and calculate how many more deals you need to win. Now you can visualize the leading indicators needed to guarantee you hit your target.

Summary 

To reach its future goals, a scaling business needs to do 2 things. 

1- They need to prove that they are predictable and that they can scale that predictability. 

2- Secondly, they need to have a well-informed strategy for those that deliver it. 

Top revenue operations teams will find opportunities for businesses to realize both of these things. This allows them to achieve the mission their founders originally wanted to fulfill.

Learn More: Schedule a Demo Today and learn how Revenue Operations can help your business grow.