What is Revenue Operations? The Ultimate Guide

A look at RevOps, the emerging practice unifying go-to-market operations

Andrew Wooler
January 28, 2022

What is Revenue Operations?

Revenue Operations (or RevOps) is an emerging practice in B2B organizations where marketing, sales, and customer success operations are integrated into a single RevOps team. Rather than each team building and running its own operations, RevOps takes responsibility for systems and processes across all revenue-facing aspects of the business. The goal of RevOps is to achieve greater visibility and alignment across marketing, sales, and customer success, which creates a better understanding of and experience for the customer, while driving a more efficient go-to-market operation that generates more revenue.

Source: Lean Data

Why do B2B organizations want Revenue Operations teams?

Marketing, sales, and customer success teams have long managed their own operations, so what’s driving business leaders to unify operations now? One cause is the rapid increase in available technologies for ops teams to understand the customer journey and execute initiatives throughout its touchpoints. For example, the average marketing ops team now uses 12 different tools to manage campaigns and data, with some teams using up to 31 different tools! It’s no wonder teams end up with a variety of tools when they now have thousands of technology vendors competing to build the best option for specific use cases. 

Source: chiefmartec.com

Ops teams often face a tradeoff between employing the best available tool for some specific activity, and ensuring that their tech stack doesn’t become too complex. Each new tool that an ops team introduces creates another place for data to hide, and makes it more complicated to connect data across different tools and functions. While trying to build a stack full of leading tech, ops teams often unintentionally create data silos, and produce data that’s difficult to combine with other functions into a coherent picture of the customer journey. 

By bringing operational systems under one roof, RevOps helps strike the balance between having best-in-class tooling for specific use cases, while ensuring that the operational stack does not get out of hand, and that data integrity can be maintained. Many organizations with misaligned operational tools and data have to undertake a massive, expensive IT effort in order to make their systems make sense together. RevOps has become appealing to business leaders to prevent this ordeal from happening, or to stop it from ever happening again. 

What market trends created a need for Revenue Operations?

Another driver of adoption for RevOps is the shift in the B2B market towards cloud services that are often subscription-based or employ product-led growth (in which users are given access to a product in order to drive sales, rather than access as the result of a sale). The traditional funnel has thought of marketing, sales, and customer success as occupying distinct phases in a linear sequence. Marketing generates interest and passes opportunities to sales to close. Sales closes deals and passes new customers to customer success to keep happy. With clear responsibilities and handoffs, each team has less of a need to cross paths. 

Source: Hubspot Blog

Yet as the subscription model has gained popularity, the easiest method for generating revenue has become retention and expansion with current customers, not closing new business. Acquiring a new customer is now 5X to 25X more expensive than simply retaining a current one. The resulting transformation for B2B go-to-market teams has been termed by Hubspot as the shift from a Funnel to a Flywheel. This new model requires marketing, sales, and customer success to act continuously in coordination with regards to a given customer, rather than completing their portion of a process, handing the customer off, and forgetting about it. 

Educating a customer on a product, growing their interest in it, ensuring they get quality usage, connecting them with a community, maintaining contacts and relationships – all of the separate marketing, sales, and customer success activities no longer occur in a predefined order, yet they need to happen in concert in order to effectively drive retention and expansion. This is especially true in the product-led model where a user could have access to a product for free with little knowledge of how to get the most value out of it. Depending on their needs and usage, the user could now be on the receiving end of activities from every different go-to-market team throughout a day or week, instead of progressing through marketing, sales, and customer success activities in a sequential fashion. For this new experience to be coherent or even pleasant for the user, it’s essential that the different go-to-market teams are completely on the same page.

As cloud and subscription services become the norm in B2B, organizations have felt the need for their go-to-market teams to be more coordinated than ever before. Unifying go-to-market operations into a single RevOps team is the natural solution to the evolving conditions in the market. 

Revenue Operations vs. Sales Operations

One of the most common misunderstandings about RevOps is that it is essentially an extended version of sales ops. The assumption is that because sales bears ultimate responsibility for revenue, RevOps should be focused on sales ops first. In practice this means organizations may try to implement RevOps by pulling together a bit of data from marketing and customer success systems, while spending most of their energy trying to make sales processes more efficient. 

Source: LaireDigital

However, as discussed in the previous section, the idea that revenue is solely a sales responsibility is outdated. Succeeding in the cloud means accepting that marketing and customer success also directly influence revenue and should be considered responsible for it. The danger for organizations when thinking of RevOps as sales ops first, is that they will not actually solve for the crucial problem of visibility and coordination for the entire go-to-market operation – the entire point of RevOps in the first place. Solving for better sales pipeline management or forecast predictability is important, but the promise of RevOps is a broader unification of the business. Sales processes should not overshadow the other critical parts of the demand engine that operational leaders need to think about. 

Revenue Operations vs. Marketing Operations

Unlike sales ops, marketing ops is not likely to be confused for RevOps, because the current B2B model does not expect marketing to center itself around revenue. For this reason, marketing ops can be uniquely difficult to bring into the RevOps fold, so it’s important to understand the contrasts between marketing ops and RevOps, in order to understand how marketing ops can be transformed to better unify with the rest of the business.

Image Source: Hubspot

One of the most crucial challenges for RevOps to address is alignment between marketing and sales – a notoriously tricky task. Currently marketing ops often plays the role of liaison between marketing and sales processes, working at the handoff of a marketing lead to the sales team to ensure sales has all the information it needs to create and pursue an opportunity. Yet because marketing systems are centered around generating and converting leads, they’re disconnected from sales and the rest of the business, which means creating alignment around the handoff between marketing and sales requires constant communication and manual effort, rather than being reducible to a simple operational process.

RevOps can act as a much more effective liaison with sales teams because, with its systems centered around revenue, it can go much deeper in its analysis and unify more of its processes with sales. This has the added benefit of also allowing RevOps to go much deeper with finance teams on what investments are most effective at generating interest and growth. 

Yet with marketing ops and sales ops currently focused around different metrics, one reality of implementing RevOps is that marketing ops must change. Marketing needs to shift from a lead-based or account-based marketing model to a Revenue Marketing model where an opportunity can be used as the single object by which to view the entire customer journey. This then allows marketing systems to be united with sales and customer success, and for common operational processes to be established across all three teams.

How does Revenue Operations create a better customer experience?

RevOps is not just about getting better efficiency out of internal processes and systems. Implemented correctly, it also should result in a better experience for current and prospective customers in terms of their interactions with your go-to-market teams.

RevOps allows for a more holistic view of the customer journey and a better understanding of the customer at each touchpoint. This can be leveraged to create a more seamless and useful experience on the customer’s end, which is especially important in the Flywheel model discussed above where a customer can rapidly alternate back and forth between being the responsibility of marketing, sales, or customer success. 

Image Source: TechGuilds

A more holistic understanding of the customer can simply mean knowing when’s the right time to push a sales conversation, versus offering educational materials or asking for feedback. It can mean optimizing your website and marketing campaigns not purely for the quantity of leads generated but for the likelihood of creating satisfied customers. It can even just mean getting the customer or potential customer the right information at the right time. The key is that with RevOps, there is always a common understanding of what the customer may want at each stage of the journey, rather than each team needing to discover the customer anew after a handoff. 

How should Revenue Operations be implemented?

To truly unify the business, RevOps needs to create standardization for go-to-market teams on the metrics and models that systems are built around. For sales and customer success this is a more straightforward task – both are fundamentally centered around revenue, and are often used to working tightly together as B2B organizations have shifted to prioritize retention and expansion over new business.

The more complicated task is identifying a common model that allows marketing to join sales and customer success in being focused on revenue, rather than leads or other marketing-specific metrics. Revenue Marketing is a new approach that aims to accomplish this by shifting marketing to an opportunity-based model, so that the opportunity object can be used to track the activities from initial engagement with a customer to past close. This then allows marketing systems to be directly linked to sales and customer success, and for all three teams to agree on common success metrics for measuring the customer journey. Implementing Revenue Marketing is the crucial first step for organizations that are pursuing a unified RevOps front and a more coordinated business.

To learn more about RevOps and Revenue Marketing, download the explainer whitepaper here.

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