Let start this post with a definition of Revenue Operations.
Revenue Operations (RevOps) is the flattening of the silos between sales, marketing, finance, and customer success operations, which keep all teams accountable to Customer, Revenue, and Profitability.
As a RevOps professional your focus is the metrics, tools, and SOP’s for the entire prospect/customer lifecycle and creates and manages consistent growth through operational productivity. RevOps mandate is to drive revenue, breaking down internal silos, alignment of all revenue departments across the Customer Lifecycle.
You provide unified metrics, tool ownership, and change management for the entire revenue funnel.
To not overstress the importance of RevOps, it should become the mainstay of your Company’s revenue-generating activities. This is the fusion of operations across Sales, Marketing, Finance, and Customer Success. This role should also be the primary liaison for your other teams such as legal and product. The primary goal is to fuel growth throughout the customer life cycle by producing efficiencies and make all teams accountable for revenue.
Below is a list of the key stakeholders that RevOps supports and their key objectives.
RevOps work with the Product Management team who manages Customer understanding, making product portfolio investment decisions. This will encompass pricing and packaging strategy, as well as your product innovation and the product lifecycle process.
The Marketing Executive and team will drive a multitude of marketing strategies and investments. This includes marketing transformation and measuring marketing impact. This will include the organization’s design and development and include Portfolio Marketing that formulates the initial design of the Go-to-market strategy, developing personas and buyer insights. providing portfolio messaging and content bringing offerings to market and providing an effective sales knowledge transfer with functional design and development.
The Marketing team will drive Demand Creation, with a clear demand management process, develop demand program design, planning, and execution, and have a clear demand program delivery mechanism, Your Marketing team may also support an Account-Based Marketing strategy with clear goals and alignment and a robust ABM infrastructure with defined ABM program planning and execution and measurement. Another very important component your marketing team will provide is a Content Strategy and Operations plan to deliver content management and technology with strategic content planning and delivery platform that uses a functional design and development platform.
Marketing will also support and harmonize Branding and Communications, including corporate communications standards, corporate messaging, and content, this can be standard proposals decks, case studies, white papers, and so on.
The RevOps team will provide the Marketing Operations, which include marketing reporting and measurement, marketing planning, and budgeting, as well as the marketing infrastructure with clear and detailed marketing data management.
Marketing (awareness/consideration)
RevOps will provide the foundation and management of the Marketing Operations functions. This includes almost all the operational tasks, from contributing to your company’s brand process, as well as strategic planning, lead management, process improvement, budget management, stakeholder analysis, quality testing, and data management. Your role is focused on the ‘business of marketing’ and not the creative parts.
RevOps is involved in designing lead workflows, providing training, and establishing company standards. RevOps set the transparent, efficient, competitive, profitable, and accountable processes for Marketing. The defining purpose of RevOps is to create alignment and order within a company. In addition to the above RevOps team handles the tools (systems) through all Revenue business units. Below are areas where RevOps will enable the Marketing team:
- Budget Management
- Production Management
- Data Management
- Campaign Management
- Lead Management
- ROI Metrics
- Reporting/Analytics
- Conversion Tracking
- Customer Marketing
The 50k View
For Marketing one of the pivotal roles of RevOps is to help define the company’s long-term goals and then provide the controls necessary to keep a company on the plan. In this role, you participate in developing the metric and designing the systems that support the company’s GTM strategy, as well as support the development of the Buyer persona.
What are some of the key performance indicators (KPI’s)?
Sales Growth: Measuring the growth in sales revenue. We will discuss this more in the next post.
Leads: Reporting on leads is vital to your understanding of the effectiveness of your marketing efforts. Your reports should include everything from the ‘Anonymous’ to ‘SQL’. Below is a sample of some high-level reports you should consider.
- New Leads Generated
- Lead Conversion Rate
- Average Lead Score
- Keyword Performance
- SEO Traffic
- Social Visits and Leads
- Funnel Conversion Rates
- Response Rate
- Content Downloads
- Brand awareness
- Marketing spend per customer
- Return on marketing investment
Sales Team Response Time: How fast are leads responded to, do you have a mechanism to track these. Below is an example of tracking of response. This is an automated workflow that measures the response from creation to first follow up. This is immensely helpful for Marketing to measure the response and if this would meet the SLA between Marketing and Sales.
Marketing Cycle (how quickly do leads convert to opps). As in above, you should have a mechanism to track the amount of time that it takes on average for your Leads to convert to Sales Opportunities.
Pipeline contribution: What is the contribution to the pipeline from marketing-generated leads.
Lead Aging: You need to track your aging of leads over time, as the quality of a lead degrades over time. Marketing research has found “the odds of making a successful contact with a lead are 100 times greater when a contact attempt occurs within 5 minutes, compared to 30 minutes after the lead was submitted.
Customer Lifetime Value (LTV): One of the most important measurements for your Company. In a blog by Herb Young, he laid out the case “The CLTV metric is powerful business intelligence that predicts the net profit from the entire future relationship with a customer. Said in simplistic terms, CLTV describes what the customer is worth financially over the course of their relationship with the company.” Herb went on to explain the role Marketing has in CLTV,
“Here are some applications of CLTV in a number of marketing activities:
- What’s a lead worth? The financial return on acquisition strategies can be determined as long as you have good lead-to-conversion rates. You can optimize your acquisition campaigns and no longer guess whether you are over-spending or under-spending on customer acquisition.
- Who are my best customers? Not all customers are equal for most businesses. Many of us are aware of Pareto’s principle, the 20/80 rule. Knowing the CLTV of different customer segments helps us to treat each customer appropriately “unequally”, dedicating more customer service to the high value customers.
- What’s the potential of each customer? Segmented marketing strategies can be used to optimize marketing spending to different customer segments. New customers may be lighter users of your product or service simply because of inexperience with it. An ongoing communications strategy that includes tips and tricks on how to use, may be the approach to increasing the CLTV of this segment.
- How does customer retention impact my business? Developing and retaining your most profitable customers is critical to the longevity and health of your business. These customers typically are more profitable than your average customer, they buy more, they buy the premium items, they are more pleasant with fewer customer service headaches, and they are more likely to refer more customers like themselves.”
RevOps should be laser-focused on this to supply the company a holistic view of all the potential ways they can increase customer loyalty and translate that into upsells and renewals. The integrated nature of Revenue Operations allows it to assimilate information and feedback from multiple teams and eliminate silos.
Another key role RevOps plays is in the development and reporting on the Service Level Agreement between Sales and Marketing. RevOps is the arbitrator of the definition of the MQL/SAL/SQL. It is RevOps responsibility to understand the synergy between the buyer’s funnel and the flow through the funnel from Anonymous to SQLs. This is vital in providing insight into the Leads to Close ratio – the number of sales leads over a period of time. Count the number of successfully closed sales over the same period of time. Divide the number of sales by the number of leads and multiply by 100.
As part of RevOps, you also want to report on the Customer Acquisition Costs (CAC). You can report on this using the simple method:
TMC / CA = CAC
or Total Marketing Costs for New Customer / Total New Customers Acquired = Customer Acquisition Cost.
Or if you a more mature company, you may want to use the more complex method:
TMC + W + MST + PS + AO / CA = CAC
or Total Marketing Costs for New Customer + Wages of both sales and marketing + Marketing and Sales cost of Tools (CRM, Marketing Automation Platform, analytics, etc.) + Professional Services (Website developers, consultants, third-party appointment setters, etc.) + Allocated Overhead for Sales and Marketing / Total New Customers Acquired = Customer Acquisition Cost.
You can further break this down by marketing channel to determine, ROI on marketing channels, such as pay-per-click, SEO, etc.
In conclusion, consider your Marketing team’s and Sales team’s goals. Your Marketing goal is to drive Sales (grow new logos), Increase revenue (larger ASP’s) and increase profit (effective spend). In a nutshell, when you analyzing your KPI’s are you driving sales efforts, with the understanding of how to make it profitable and effectively redistribute your marketing dollars to ensure your efforts are as productive as possible?
In part II we will focus on Sales (pre-sales/acquisition) aka Sales Ops.
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